Fed Faces Inflation Heat: What’s Next for FOMC？

Tuesday, 30th April 2024, 03:30 – Australia Retail Sales (MoM) (Mar)

In February, retail sales in Australia saw a slight increase, fueled by heightened spending on clothing and dining out, likely spurred by popular Taylor Swift concerts drawing crowds. According to Australian Bureau of Statistics (ABS), Australia increased by 0.3 percent compared to January, which had seen a larger rise of 1.1 percent. Spending in Australia remained sluggish despite a modest increase attributed to Taylor Swift concerts due to ongoing pressures from relatively high inflation and the expectation of prolonged elevated interest rates. However, the upcoming data is anticipated to remain relatively stable, primarily due to Australia’s strong job market.

Wednesday, 1st May 2024, 14:15 – US ADP Nonfarm Employment Change (Apr)

The U.S private sector employment increased by 184,000 jobs in March and annual pay was up 5.1 percent year-over-year. It was the largest addition since July and higher than the expected reading of 148k new private jobs with the biggest increases for job changers were in construction, financial services and manufacturing. The consistent trend of robust job reports suggests that upcoming data will likely continue to indicate the strength of the labor market.

Wednesday, 1st May 2024, 20:00 – U.S Fed Interest Rate Decision

During the previous meeting, the Fed opted to keep its interest rate steady at 5.5%, a move that was largely anticipated by both economists and markets. Concerns arose following early 2024 inflation data, suggesting that achieving the targeted annual 2% inflation rate might take more time than initially projected. Consequently, market expectations indicate that interest rates will remain unchanged for the next decision with fixed income markets suggesting the possibility of rate cuts starting in July or September. Therefore, it’s unlikely that interest rates will see any movement until at least July.

Friday, 3rd May 2024, 14:30 – U.S Nonfarm Payrolls (Apr)

In March, the U.S. job market experienced a significant upturn, with nonfarm payrolls surging to 303,000, surpassing the anticipated 200,000. This increase exceeded the adjusted rise of 270,000 observed in February, underscoring the robustness of the labor market. With U.S. job figures consistently outpacing consensus estimates for the past five months, there is an expectation within the market for this trend to persist.