High Impact Events – August 2021 Week 2 #CPI

Here are the high Impact Events for this coming week.

The CPI has been increasing every month . It will come as no surprise that for August, the CPI should follow the same trend, up.

indeed , a rising CPI will result in a higher interest rate. The US Treasury 10 yr note yield has been on an slight upward trend even though the overall trend is still bearish.

Fed officials have started to beat the tapering drums. This past week, another two senior policymakers threw their weight behind dialing back stimulus soon. One of them was Vice Chairman Clarida, the Fed’s second in command. The other was Board Governor Waller, who went as far as saying that if the next couple of employment reports are strong, the Fed should get the ball rolling in September already. Both are permanent voters in the FOMC, so their views carry weight. 

The dollar’s path this week will depend on the CPI result. It could determine whether the prospect of a September tapering announcement is realistic or not. The hotter inflation is, the better the chances that the Fed gets moving early. 

In general, this week should be relatively calm for equities as long as TNX maintains its overall bearish trend even though there is a minor bullish trend up this week in anticipation of a higher CPI.

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