Today investors were served with several central bankers statements. In the context of the Fed, it is worth recalling that due to the trading scandal, two local Fed presidents - Rosengren and Kaplan - resigned. Today, the head of the Philadelphia Fed, Harker, spoke before the panel discussion at ECB Forum. He is considered a hawk but is not a voting member in 2021 and 2022.
- If there is no agreement in Congress to extend the budget limit, it could have a major economic impact.
- Inflation will remain above 4% this year and above 2% in 2022
- No interest rate increases are expected before the end of 2022 / beginning of 2023 (current market consensus)
- Harker wants to start slow and methodical tapering, even in November and end the process in the middle of next year (consensus among Fed members)
- Risks to the economy currently pose supply issues and a possible spread of coronavirus
- The Fed's asset purchases are no longer helping the economy at the moment
- Lack of government funding is a potential problem and could weaken confidence in US debt and could cause problems for the dollar
Source: InTouch Capital Markets
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile app
At the moment, the dollar remains strong against other currencies, but if the government funding problem is not resolved soon, it could have a huge impact on the dollar and bond yields (which may rise, but not because of the positive aspects). Source: xStation5
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
