Daily update
Daily update
- Federal Reserve Chair Powell is testifying to the Senate Banking Committee today. The issue is whether Powell (who is not an economist) will be able to answer any perceptive questions that might be asked. If US inflation is lower than in Europe, why is the Fed not cutting rates? Why emphasize data dependency when data is unreliable and policy works with a lag?
- The Powell Fed has become more politically sensitive—Powell has tended to focus more on issues politicians care about and less on what an independent central banker should worry about. The best to hope for today is probably recognition of some of the recent data weakness, and retaining the option of a September rate cut.
- The UK June BRC shop sales index showed a falling value of sales against expectations for an increase. This may be weather related (June has been moderately moist), but as a value measure this might also reflect further price discounting as consumers refuse to accept price increases.
- The Netherlands gives final June consumer price data—which almost never changes from the initial print and is not a focus. For the time being, the noise of European politics is likely to be the main concern for markets.
