The 2 biggest players in the US economy will take the stage this week, as President Trump and Fed Chairman Powell speak amid signs the nation’s trade war with China may be thawing.
President Trump will deliver a speech at the Economic Club of New York Tuesday, with investors hoping he sheds light on a planned initial deal with China.
Any comments on trade from the President could prove Key to Chairman Powell’s outlook when he testifies before lawmakers in Washington on Wednesday and Thursday, his first major appearances since the cut rates last month and signaled its easing plans were now on hold.
While the current warming trend on the trade front and favorable market response may be mitigating the need for a December rate cut, we continue to expect a need for further accommodation simply executed at a slightly later date. Chairman Powell will have the opportunity to reiterate such a message this week.
Economic data will help show how much of a shadow the trade dispute has cast over the rest of the world. A report from Germany will show whether the euroarea’s biggest economy entered a recession in Q-3, while the UK and Japan are also due to release their latest growth figures