Powell Marks One Year on the Job as Federal Reserve Turns Dovish
Jerome Powell this week marked his first year as Chairman of the U.S Federal Reserve.
(Bloomberg) -- Jerome Powell this week marks his first year as chairman as the Federal Reserve under pressure to deliver on the commitment of his opening day to explain “what we are doing and why we are doing it.”
Powell hosts a town hall meeting with educators in Washington on Wednesday, a day after he celebrates his anniversary. He does so after a year which witnessed four interest rate hikes and numerous tweets from President Donald Trump. It ended with policy makers delighting markets by signaling they may not tighten monetary policy again for a while.
The Feb. 6 appearance -- which will be live streamed to the public who will also be able to join the discussion via social media -- hands Powell a chance to flesh out his reasoning for the dovish turn amid questions over what necessitated such a dramatic shift.
“Monetary policy makers may have been spooked by economic and financial developments at their first meeting of the year, but the labor market remains on very sound footing,” said Carl Riccadonna, chief U.S. Economist at Bloomberg Economics. “Policy makers will be satisfied to let the data do the heavy lifting, rather than Fed communications, in terms of convincing market participants of the need for further action.”
Powell isn’t alone in speaking. Loretta Mester of the Cleveland Fed is scheduled for Monday and Vice Chairmen Randal Quarles and Richard Clarida speak on Wednesday and Thursday respectively. James Bullard of the St. Louis Fed has an appearance on Thursday too and Mary Daly of the San Francisco Fed speaks the next day.
Elsewhere, there are monetary policy decisions in the U.K., India, Mexico, Australia, Brazil and across eastern Europe. Data delayed by the government shutdown in the U.S. is scheduled to finally be published, while numbers in the euro area will shed more light on how fast its economy is slowing.
Here’s our weekly rundown of economic events.
The U.S.
The U.S. will start to see the economic reports delayed by the shutdown. The Census Bureau will post November’s trade balance on Thursday, with economists surveyed by Bloomberg projecting the deficit will narrow to $54 billion from $55.5 billion the prior month. Eyes will also turn to the imbalance with China as the two largest economies continue to negotiate the future of their trade relationship. Those talks are likely to come up in Trump’s State of the Union address on Tuesday. The final reading on November factory orders is now scheduled to for release Feb. 4.
For more, read Bloomberg Economics’ full Weekahead for the U.S.
Europe, Middle East and Africa
Industrial data from Germany along with services purchasing managers index from Italy and Spain and the final such readings for the region will provide a further glimpse into the health of the euro-area economy after a torrid end to 2018. The European Commission will also release fresh economic predictions.
In the U.K., Bank of England Governor Mark Carney will on Thursday present his final set of forecasts before Brexit is due to happen on March 29 although they will be clouded by the unknowns of what that might entail. Iceland, Poland, Serbia, the Czech Republic, Russia and Romania all set rates too although the betting is each will leave them unchanged. Turkish inflation is seen staying around 20.3 percent.
For more, read Bloomberg Economics’ full Weekahead for EMEA
Asia
A string of interest rate decisions are on the calendar although China will be celebrating its new year. In India, Bloomberg Economics is predicting Governor Shaktikanta Das to cut interest rates by 25 basis points on Thursday and adopt a neutral stance after tightening policy in October. On Tuesday, the Reserve Bank of Australia is likely to extend its rates pause with inflation still stuck below the bottom of its target range. Thailand and the Philippines are predicted to leave benchmarks on hold. In Japan, a string of data will come on Friday with news on household spending, wages and the current account.
For more, read Bloomberg Economics’ full Weekahead for Asia
Americas
Venezulea will continue to capture the headlines with pressure mounting on Nicolas Maduro at home and abroad. On Wednesday, Brazil’s central bank is expected to keep its key interest rate at a record low of 6.5 percent in what is likely the last meeting under President Ilan Goldfajn. The next day, Mexican policy makers are set to keep their benchmark at the highest in a decade as they meet for the first time since President Andres Manuel Lopez Obrador’s two appointees joined the board. They will have new inflation data which comes out that day. In Canada, consumer confidence data on Monday and the employment report on Friday will signal how soft the economy is.
For more, read Bloomberg Economics’ full Weekahead for Latin America
--With assistance from Craig Stirling and Jeff Kearns.
To contact the reporter on this story: Simon Kennedy in London at skennedy4@bloomberg.net
To contact the editors responsible for this story: Stephanie Flanders at flanders@bloomberg.net, Zoe Schneeweiss, Fergal O'Brien
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