As Fed Deliberates, More to Consider
As our research fellow Jia Liu pointed out last week, the Federal Open Markets Committee already has all the major information on the economy that it will receive in advance of its two-day meeting that starts on Wednesday.
Nevertheless, there are a few data points that will come out just before and during the meeting, as they deliberate whether to raise interest rates this month.
On Tuesday, we’ll receive August data on retail sales from the U.S. Census Bureau. Consumer spending makes up a sizable portion of gross domestic product, a vital barometer of economic health. Also out that day is the Fed’s monthly index of industrial production. Just as the meeting begins on Wednesday, the all-important Consumer Price Index for August will be out from the Bureau of Labor Statistics. And August housing starts data will be out Thursday.
While the decision on whether to raise interest rates is being intensely watched, it’s not the most important question surrounding interest rates, said Bob Hughes, senior research fellow at AIER. There is likely to be a rate increase sometime this year, but more important will be the pace of increases going forward, Hughes said.
