Fed Day
What’s in Today’s Report:
- PPI – Where Will Inflation Settle?
- Empire State Manufacturing Survey Misses Estimates
- Retail Sales – Spending Shift from Goods to Services
- A Warning Sign from Dr. Copper
Stock futures are flat this morning as a sense of Fed paralysis grips global markets ahead of the FOMC announcement while economic data disappointed overnight.
Chinese Fixed Asset Investment, Industrial Production and Retail Sales data all missed estimates for the month of May which resulted in Asian markets underperforming overnight.
Looking into this morning’s trading session, there are two lesser followed economic reports due to be released: Housing Starts (E: 1.630M) and Import & Export Prices (E: 0.7%, 0.7%) but neither release should move markets with the Fed looming.
The Biden-Putin meeting in Geneva will also get media attention but it is very unlikely to actually impact markets. Treasury Secretary Janet Yellen’s testimony before Congress regarding Biden’s budget (10:00 a.m. ET), however, could move markets as she will likely be discussing taxes and any hint of a material hike in capital gains rates or corporate tax rates could weigh on markets even ahead of the Fed.
Today’s main event for the markets will of course be the conclusion of the June Fed meeting with the FOMC Meeting Announcement at 2:00 p.m. ET and then Fed Chair Powell’s Press Conference at 2:30 p.m. ET. If anything causes tapering expectations to be pulled forward towards September or evidence emerges of plans to raise rates in 2022, that will be viewed as hawkish and cause significant volatility across assets classes. Otherwise, an “as expected” or dovish meeting outcome will likely result in equities continuing to trade at or near all-time highs.