All eyes are on the Federal Open Market Committee (FOMC) meeting as it begins on Tuesday, with markets questioning the potential implications for the future of interest rates. Deutsche Bank Senior US Economist Brett Ryan joins Catalysts to share his expectations regarding the Fed’s decision.
Ryan acknowledges that in light of recent inflation data, “it’s difficult” to envision the Fed adopting a dovish tone during tomorrow’s decision announcement. Instead, he anticipates the central bank will denounce fears of an impending rate hike but hold interest rates steady amid the elevated inflationary environment “until they see more progress” toward their target.
Turning to consumer spending, Ryan says that since the pandemic, “consumer spending has been divorced from consumer confidence.” However, Ryan notes that “the important thing to follow” is the labor market, and “what’s supporting spending is labor income growth.”
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This post was written by Angel Smith