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Federal Reserve's decision is up this week, investors are looking forward to positive trend
Trader's main focus this upcoming week will undoubtedly be the results of the September policy meeting of the Federal Reserve, which will provide a clearer outlook on the current standing of the economy.
The FOMC (Federal Open Market Committee) members will be having their monetary policy-setting meeting on Tuesday, in which they will be discussing the most recent movement of the economic recovery. Fed Chair Jerome Powell will also be having a press conference on Wednesday to discuss their monetary policy statement.
For traders, the meeting and press conference will give them an insight as to when the Fed will be formally announcing and commencing the tapering of the current asset purchase program, or also called QE (quantitative easing). This program has helped the equity market stay afloat for more than a year now, having the Fed buy $120 billion a month worth of US treasuries and securities.
The Fed had been saying that the tapering will commence once "substantial further progress" is achieved for their inflation and employment goals. The meeting would also be updating the Summary of Economic Projections of the FOMC, which will generally be the member's outlook towards economic conditions and possible interest rates for the upcoming years. Take note that the September projections will include expectations for the year 2024.
The other focus, which is the housing data, will come in with a series of prints this coming week, generally providing the investors an update towards the housing sector, with economists suggesting a deceleration on this as well. They considered the current material shortages to pull down constructions in the future, hence resulting to a lower to negative expectation for this sector. Consensus economists anticipate a drop for August building permits by 1.8% compared to its 2.3% rise last July. Housing starts, on the other hand, is expected to climb 1.0% in August compared to the sharp 7.0% decline last July.
On Wednesday, existing home sales will also be released in which estimates lean towards the weakening of the sector. Economists expect a drop of 2.1% for August against the 2.0% rise in July.
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