It’s not just Canada’s central bank that may push its benchmark rate hike forward to a later date, with the U.S. Fed increasingly poised to do the same.
Over $5 trillion has been lost in global equities value following China’s decision to devalue its currency on August 11, and that is being reflected on stock exchanges and indices across the world, including the Dow Jones and the TSX.
No decision has yet been made by the Fed about its benchmark rate, but Monday’s turmoil in the markets is fueling speculation that the central bank will delay hiking its rate. That, say Canadian analysts, would send a clear sign that a Canadian economic recovery could be many more months in the making than previously thought.
These are the economic events that will shed light on what can be expected at the Fed’s next meeting in September.
Due: Sept. 4 at 8:30 a.m. New York time
"We are concerned that if August payrolls disappoint, market expectations for September liftoff could fall even further," he wrote in the note. Fed funds futures currently imply about a one-in-four chance the central bank will lift interest rates at their September meeting. That's down from almost even odds on Aug. 18, the day before Fed minutes of their July gathering were released.
Due: Aug. 28 at 10 a.m. and Sept. 11 at 10 a.m
Due: Sept. 15 at 8:30 a.m.
Consumer confidence and retail sales will reveal just how much American households have been affected by economic instability.
Household spending, meanwhile, accounts for 70% of the U.S. economy. And that data will reveal how citizens view the economic climate.
Consumer price index
Due: Sept. 16 at 8:30 a.m.
"What has kept the Fed from liftoff so far" is the inflation picture, said Ward McCarthy, chief financial economist at Jefferies LLC in New York. "With energy prices and commodity prices in a downward spiral, they have to see what it bottoms out at before they can make an intelligent policy decision."
With files from Bloomberg Business