- We expect further deceleration in m-o-m core CPI inflation, and the recent surge in COVID-19 cases and inventory constraints may weigh on retail sales during August.
- Peak re-opening pressures may have passed. We expect growth and inflation to begin moderating in H2 2021 as the Fed shifts to carefully removing accommodation.
- Our overview highlights the key releases of US economic market data.
US Economic Weekly Key Insights
- Comments from New York Fed President Williams suggest the FOMC core remains comfortable with a November tapering announcement despite disappointing August NFP, consistent with our base case.
- However, his remarks also indicate the FOMC is shifting towards a faster pace of tapering.
- We now believe the Fed will taper asset purchases per month instead of per meeting, ending purchases after June 2022, earlier than our previous forecast of September 2022.
- We expect m-o-m August core CPI inflation to moderate further to 0.2% from 0.3% in July as inflationary pressures ease, while August retail sales and industrial production are likely to decline.
- Pressure continued to build this week in Washington as Congress has yet to establish a clear plan for addressing looming fiscal deadlines at end-September and end-October
Read our full US Economic Weekly report here.
Contributor
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Aichi Amemiya
US Economist
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Rob Dent
Senior US Economist
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Kenny Lee
US Economist
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