5 Important Developments to Follow in the Next Week

5 important developments to follow in the next week have been compiled. Next week's Fed speeches will be important.

The perception that the Fed's (US Federal Reserve) interest rate hike may take place sooner than expected is expected to determine the market conditions in the next week and perhaps in the coming months.

1.FED Signals Interest Rate Increase

Last week, the FED surprised with two possible rate hikes in 2023, earlier than the markets expected, and shed light on the possibility of discussing the reduction of the $120 billion monthly incentive program. The change in the guide, St. Louis Fed Chairman James Bullard's comments. On Friday, Bullard said the move to tighten monetary policy more quickly was a "natural" response to economic growth and rising inflation. Stronger-than-expected inflation had already brought to mind the questions of whether the FED would make a move sooner. As of this week, it is said that there may be more uncertainty ahead of the central bank's July meeting and its annual conference in Jackson Hole, Wyoming, in August.

2.Jerome Powell's Statements Will Be Followed

Markets will watch closely on Tuesday Fed Chairman Jerome Powell's statements on the Fed's emergency loan programs and current policies before the House Elected Subcommittee on the Coronavirus Crisis. New York Fed Chairman John Williams and St. Louis Fed Chairman James Bullard will speak on Monday, Cleveland Fed Chairman Loretta Mester and San Francisco Fed Chairman Mary Daly will speak on Tuesday. Other speakers include Atlanta Fed Chairman Raphael Bostic and Boston Fed Chairman Eric Rosengren.

3.Stock Market Lost Value

On Friday, the US stock market closed the day with depreciation. The Dow and S&P 500 had their worst weekly performance since October and February. The Nasdaq index also closed lower. Tim Ghriskey, senior investment strategist at Inverness Counsel in New York, said: "I'm not surprised by the sales in the market. I wouldn't be at all surprised when I think about the strong trend we've had for a long time and seen profit realization." "Next week a lot of Fed officials will be speaking and we're going to have the same thing: some more hawks and some more pigeons, so we'll see this and that."

4.Economic Data Will Be Announced

Investors will closely monitor next week's economic data for clues as to whether the recent rise in inflation, in which the CPI in May rose the fastest in 13 years, continues. Personal income and expenditure data for May, including the core personal consumption expenditures price index, which is said to be the FED's favorite measurement, will be released on Friday. The economic calendar will also include new and existing home sales, durable goods orders, manufacturing and services sector activity, and initial weekly unemployment claims.

5.Bank of England (BoE) Meeting

The Bank of England (BoE) will hold its policy meeting on Thursday, which will be the last for senior economist Andy Haldane. Haldane is the only person on the BoE's monetary policy committee to advocate reducing stimulus measures amid rising inflation. Inflation exceeded the 2 percent target for the first time in two years in May. Many analysts do not foresee a change in policy after the BoE said last month that it will gradually reduce the weekly pace of bond purchases. British Prime Minister Boris Johnson's decision to delay full opening by a month may be a reason for politicians to hold back.     Source: Investing.com