US Economy and Credit Markets Ended Jan. 28, 2022
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The Fed left interest rates unchanged last Wednesday, as expected, but signaled it will raise interest rates and end its asset purchases in March as it starts to move away from the highly accommodative monetary policy it put in place during the pandemic. The moves come in response to high inflation, which continued to show up in data released last week. The Employment Cost Index showed wages and benefits paid by employers grew 4% last year, its highest increase since 2001. Meanwhile, the Personal Consumption Expenditures Price Index, a measure of prices paid for goods and services in the U.S., increased 5.8% from the prior year, which was its highest increase since 1982. This comes on the heels of December's 7% increase in the Consumer Price Index. The Fed last raised interest rates in December 2018 and cut them to near zero in March 2020 in response to the pandemic. Other economic data released last week showed the U.S. economy grew at a 6.9% annual rate in the fourth quarter of 2021, which was faster than expected. Major economic reports (related consensus forecasts, prior data) for the upcoming week include Monday: January MNI Chicago PMI (61.8, 63.1); Tuesday: January ISM Manufacturing (57.5, 58.7), January Final Markit US Manufacturing PMI (55.0, 55.0); Wednesday: January 28 MBA Mortgage Applications (N/A, -7.1%), January ADP Employment (208k, 807k); Thursday: January 29 Initial Jobless Claims (250k, 260k), December Final Durable Goods Orders (N/A, -0.9%), December Factory Orders (-0.2%, 1.6%); Friday: January Change in Nonfarm Payrolls (168k, 199k), January Unemployment Rate (3.9%, 3.9%).
Posted on Monday, January 31, 2022 @ 8:12 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.