Traders cautious as Federal Reserve meets next week
Traders and market experts are expecting increased volatility as the Federal Reserve meeting approaches. The Fed decision could have some impact of the Wholesale inflation data that came in Friday, suggesting decline in the PPI for fourth straight month.
During the Federal Reserve policy meeting next week, Fed Chair Janet Yellen and other members could take a call on interest rates. The inflation has remained lower than Federal Reserve’s two percent target.
Fed policy watchers are expecting Federal Reserve to remove the word ‘patient’ from its statement. If Federal Reserve skips the interest rate hike in the upcoming meeting, we can expect a rate hike in next policy decisions.
The GDP growth has remained lower than expectations over the last quarter. Economic experts at Wells Fargo have predicted 3 percent GDP growth during spring and summer. The unemployment has registered a fall over the last few months, with employers offering more jobs every month. Many businesses are also considering offering a wage increase to workers as the job market has remained strong.
Inflation has remained under Federal Reserve target and is expected to remain lower in the coming quarter as well. The major factor to lower inflation has been the energy cost.
Talking about his expectations from Fed Chair Janet Yellen, Peter Boockvar, market strategist at The Lindsey Group said, "Ultimately people are going to have to make a decision on not what the Fed's doing, but on the economy and earnings."
Stock markets will be closely watching the Federal Reserve’s policy meeting next week and market experts are looking at a volatile week ahead.
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