US Economy and Credit Markets Ended July 30, 2021

Treasury yields dropped slightly over the course of the week as the Federal Reserve met and kept the target range for the fed-funds rate between 0 and 0.25%. Investors expected the central bank to keep rates unchanged and asset purchases at $120 billion monthly. Fed officials said that they would continue to access in coming meetings whether the economy had progressed enough for tapering of future bond purchases. Fed Chairman Jerome Powell said that they still have not agreed on timing of raising interest rates but that it was still a ways off. He also said that the recent high inflation readings were tied to the sectors of the economy that reflect reopening and the price pressures do not appear to be spreading to other parts of the economy. Consumer confidence rose to a 16-month high, which is the highest since the beginning of the pandemic, beating analyst expectations. However, 2nd Quarter GDP was significantly lower than expectations, growing at a rate of 6.5% compared to an expert consensus rate of 8.4%. Initial Jobless claims fell to 400k, but still were slightly ahead of analyst expectations of 385k. Major economic reports (related consensus forecasts, prior data) for the upcoming week include Monday: July Final Markit US Manufacturing PMI (63.1, 63.1), June Construction Spending MoM (0.4%, -0.3%), July ISM Manufacturing (60.8, 60.6); Tuesday: July Factory Orders (1.0%, 1.7%), June Final Durable Goods Orders (n/a, 0.8%); Wednesday: July 30 MBA Mortgage Applications (n/a, 5.7%), July ADP Employment Change (650k, 692k); Thursday: June Trade Balance (-$74.0b, -$71.2b), July 31 Initial Jobless Claims (380k, 400k); Friday: July Change in Nonfarm Payrolls (858k, 850k), July Unemployment Rate (5.7%, 5.9%).
Posted on Monday, August 2, 2021 @ 8:32 AM

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.