Flood of Fed Commentary Next Week

The flood of economic data set to hit the wires next week cannot be understated, though the true weight of each release remains questionable in terms of its impact on Fed policy ahead of the October FOMC meeting. Still, several key reports will deserve attention, and with the Fed’s blackout window now expired, a wave of Fed speakers will provide their latest views on the economy and monetary policy.

With volatility relatively low, the September Fed meeting in the rearview, and earnings season still three weeks away, markets may be entering a potential lull in major catalysts. This could shift the focus toward market narratives and headline-driven moves.

Key Economic Data

• Tuesday: The data frenzy begins with S&P Global Manufacturing and Services PMIs. While they typically don’t make as much of a market impact as the ISM surveys, these releases provide timely insights into business sentiment. The focus will be on the Prices Paid component, a key forward-looking inflation gauge that often foreshadows trends in PPI and CPI.
• Wednesday: New Home Sales data arrives, which could give homebuilder stocks a needed boost after Lennar (LEN) issued a disappointing delivery forecast and weak demand outlook last week.
• Thursday: The final estimate for 2Q GDP will be released. Historically, these revisions rarely produce major surprises, and expectations remain muted following the August 28th revision.
• Friday: Personal Consumption Expenditures (PCE), including the Fed’s preferred inflation measure, the Core PCE Price Index, will take center stage. This could prove the most consequential release of the week. While inflation remains sticky, recent softer PPI data suggests the potential for some deceleration in August prices.

Almost every FOMC member is on the speaking circuit next week, including Chair Jerome Powell, who will address the Greater Providence Chamber of Commerce at an Economic Outlook Luncheon on Tuesday at 12:35 p.m. ET. Given the mid-tier nature of most economic data, Powell’s remarks and those from other Fed officials are likely to command the most attention from traders. Unless Friday’s PCE release surprises significantly, the bulk of economic reports may not be strong enough to meaningfully sway markets.

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