Central Banks Take Center Stage

January 30, 2017

Central Banks Take Center Stage Photo

Stocks made new highs last week as the Dow Jones Industrial Average broke above the 20,000 level on optimism for pro-growth policies from the Trump administration. The week ahead will provide the first significant update on several key central banks’ thinking for 2017. Here is what we’re watching.

On Tuesday, the Bank of Japan (BOJ) will announce its policy decision. At this point, the consensus is there will be no change in monetary policy outlook for interest rates or expected inflation. Look for any indication that the BOJ sees improvement in the economy. The BOJ is on a slow path to a rate increase in 2018.

On Wednesday, the Federal Reserve will make their policy announcement. Expect no change in interest rates, but look for more commentary on the pace of economic growth and labor market conditions.

On Thursday, the Bank of England and Governor Carney will give its first economic update of 2017. Look for commentary on the impact of the weakening pound on inflationary pressures.

After hearing from the three central banks and numerous high profile earnings reports, the week concludes with the January employment report. Expect the labor market to continue to tighten and wage pressures to continue to increase.

Tags: Monday Morning O'Malley | U.S. economy | Federal Reserve | Employment numbers | Central banks

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