The US Federal Reserve will take centre stage again this week, when some forecasters are expecting its chairman to address an increasingly poor inflation outlook.
Already a subscriber?Australia’s sharemarket is poised to recover some of Friday’s losses at the opening bell on Monday, as traders brace for a more hawkish assessment of the US monetary policy outlook from Federal Reserve chairman Jerome Powell.
compelling traders to push out expected rate cuts and price in potential further rate rises from the Reserve BankIn the US, gross domestic product growth fell short of expectations, rising 1.6 per cent in annualised terms in the first three months of the year, from 3.4 per cent in the December quarter.Advertisement
Earlier this month, he said the data had not given the central bank “greater confidence” that inflation was coming under control, and it was likely to take longer than expected to achieve that confidence. “Powell will face a tightrope between tempering rate cut expectations while avoiding a sharp market reaction, which would extend the meaningful tightening in financial conditions that has occurred since March,” he said.
Mr Powell will speak ahead of the release of monthly US unemployment data, due on Friday and expected to hold firm at 3.8 per cent.
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