Monday, May 29, 2023
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Market thinking: Powell to the people

(Reuters) – Jamie McGeever

awaits the end of the Asian market.

Federal Reserve Chairman Jerome Powell on Friday delivered a Jackson Hole speech on the economic outlook that will set the course for every financial market in the near term and set the stage for the Fed’s September meeting. Lower tone 20-10 Policy meeting.

On Thursday, a slew of Fed officials shared their views on the economy, inflation and interest rates, with the most notable market impact being a bull market that has flattened the U.S. yield curve to its highest level in a week.

US Yield Curve:

Wall Street also regained more ground. The Nasdaq rose about 1.5%, also helped by a 6% gain in Hong Kong’s tech sector overnight, the biggest gain on market rumors of progress in U.S.-China audit discussions in nearly four months.

New stimulus from Beijing to help support China’s faltering economy will not be a game-changer but will boost local sentiment, at least temporarily.

But there’s only one game in town — Powell’s speech at the Fed’s annual policy symposium in Kansas City, Wyoming. How tough will he be? Will he signal a policy shift?

On the Asian corporate front, the most anticipated event on Friday was the semi-annual report of Chinese property developer Longfor Group Holdings. The real estate sector is in trouble, and sources told Reuters earlier this month that state-owned China Bond Insurance Co. Ltd. was required to provide guarantees for Longfor’s bond offering.

Japan’s inflation rate is expected to rise to an eight-year high of 2.5% from 2.3% in August, putting further pressure on the Bank of Japan’s policy of unlimited purchases of government bonds to limit inflation – The annual rate of return is 0.77%.

If inflation were to hit 2.8%, it would be the highest since the peak of Japan’s early 1990 boom.

Other key developments Friday that should give the market more direction:

US PCE inflation (July)

University of Michigan inflation expectations (August, final)



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