Fed officials to explain why taper was put on hold
They are not going to explain anything - they are going to promise, start the rumors ... all what they did the last time too. All in order to keep doing what they are doing now. They are bringing money to their employees - why should they change anything?
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The biggest news for the economy that may come this week isn’t even on the docket yet.
That would be, of course, the nomination of the next chairman of the Federal Reserve. With Larry Summers having removed himself from consideration, most observers expect Janet Yellen, the Fed’s current vice chair and someone likely to continue the course of Ben Bernanke, to get the position.
Of course, most observers expected the Fed to taper last week — so stay tuned.
And even if President Barack Obama doesn’t announce a nomination, there will be plenty of Fedtalk to consider — at least nine scheduled speakers from Monday to Friday.
“The market will be looking for an explanation on the non-taper decision delivered in the latest FOMC decision. Several voting members are due to be on the wires, while their opinions on the leadership issue may also be sought,” said currency analysts at UBS.
Tuesday’s release of consumer confidence data could “offer a reality check” for the recent dramatic drops in jobless claims, says Peter D’Antonio of Citi.
Jobless claims data have plummeted the last two weeks, but that’s due to the difficulty in computer upgrades in California and Nevada that have kept those states from reporting the layoff information.
The durable-goods orders report, coming Wednesday, is also one that’s prone to volatility, mostly on account of the month-to-month trends in aircraft orders. Economists expect a 1.5% drop in August after a 7.4% nosedive in July.
The broader picture in the industrial sector isn’t that bad. Core capital goods orders have grown four of the last five months, and economists expect an improvement in August as well. A key manufacturing survey from the Philadelphia Fed was particularly upbeat.
“The most recent round of manufacturing indicators supported our view that the manufacturing is gaining some momentum after a soft patch earlier in the year,” says Daniel Silver of J.P. Morgan.
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