What Would a “Run Hot Economy” Mean for Markets?
What’s in Today’s Report:
- What Would a “Run Hot” Economy Mean for Markets?
- Retail Sales Data Takeaways – Consumer Resilience Persists
Futures are slightly lower ahead of the Fed decision after the Chinese government ordered tech companies to halt purchases of all AI chips from NVDA (-1.5% pre-market).
Economically, Eurozone Core HICP (CPI equivalent) held steady at 2.3% in August, meeting expectations which is helping tamp down worries about a potential resurgence in global inflation pressures.
Looking into today’s session, there is one economic report due to be released this morning: Housing Starts & Permits (E: 1.37M, 1.37M), but barring a big surprise one way or another, the market reaction should be limited as the Fed decision comes into focus.
There is a 4-Month Treasury Bill auction at 11:30 a.m. ET that could prompt a modest to moderate move in short-term Treasuries as traders attempt to gauge the near-term outlook for Fed policy ahead of the FOMC release, but again any market reaction should be limited.
The September FOMC meeting announcement will be released at 2:00 p.m. ET (E: -25 bp rate cut) followed by Fed Chair Powell’s press conference at 2:30 p.m. ET. An as-expected or dovish meeting outcome should support new stock market highs while the biggest risk to the rally is a hawkish surprise that could make for a painful afternoon selloff in the broader equity market.
