This week’s Federal Reserve (Fed) meeting and another budget battle brewing in Washington, D.C., will likely dominate financial market headlines. Even though the Fed is almost certain to announce another rate hike pause on Wednesday, investors will look for clues about the future path of Fed policy. The September dot-plot projections will show whether the Fed’s view is shifting gradually more dovish. A growing number of Fed officials have recently communicated a preference toward taking a “wait and see” approach on more rate hikes.1
The budget impasse in Congress could also stir market volatility as investors grow weary of more government dysfunction shortly after the Fitch downgrade of the United States. The risks of a prolonged budget battle appear to be increasing at a time when the Congressional Budget Office is warning politicians of the unsustainability of current deficit spending.
This week’s economic calendar is highlighted by more data on the state of the housing market with housing starts on Tuesday and existing home sales on Thursday in addition to the S&P Global Manufacturing and Services Purchasing Managers’ Index reports out Friday.2
1Forbes – Fed Officials Hint At Pause In Interest Rates, Await Further Data; 9/7/23
2MarketWatch – U.S. Economic Calendar; as of 9/18/23
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