Financial markets are starting the week just as they finished the last — struggling, as numerous Federal Reserve (Fed) officials indicate that they are prepared to stay the course on aggressive tightening. Fed Chair Jerome Powell is unlikely to waver from this hawkish tone during his speech Friday at the Kansas City Fed’s annual Economic Policy Symposium in Jackson Hole. The bond market is again pricing in higher odds of another 75-basis-point rate hike next month despite the better inflation news this month.
This week’s economic calendar is a busy one, highlighted by the manufacturing and services Purchasing Managers’ Index out Tuesday, new home sales data Wednesday, and the Fed’s preferred inflation gauge — personal consumption expenditures — on Friday. Another look at the second-quarter GDP on Thursday may validate that the U.S. economy entered into a technical recession despite recent attempts to change its definition.
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