With hurricane noise beginning to soften, economic focus turns to Fedspeak

The word “hurricane” will probably appear a lot less in the economic reports slated for the week, but not entirely.

A wave of economic data, including consumer prices, retail sales and housing starts for October, is likely to show far less of an impact from the hurricanes that battered Florida and Texas.

After big rises in both CPI and retail sales in September, both are expected to remain unchanged in October. So-called core CPI, which excludes food and energy, is expected to rise 0.2%. See our Economic Calendar.

“We cannot rule out the possibility of inflationary pressure arising from the hurricanes being realized with a longer lag than we initially thought,” said Lewis Alexander, U.S. chief economist at Nomura.

But overall, the sense is that the U.S. economy is on a firm footing.

“As we’ve noted before, however, after sorting through the hurricane-related noise in the data nothing we’ve seen changes our view that the U.S. economy remains on a path of solid growth,” said Richard Moody, chief economist at Regions Financial.

The New York Fed’s nowcast is forecasting growth of 3.15% in the fourth quarter, and the Atlanta Fed’s GDPNow is pointing to an even stronger 3.3% growth rate.

The market may pay more attention to a wave of speeches from Federal Reserve officials, with nine expected to talk. Though a December rate hike is now considered a near lock, the big question will be to what degree interest rates will be lifted in 2018.

Federal Reserve Chairwoman Janet Yellen, now in her waning days running the central bank, will be in Frankfurt for an all-star central bank panel with European Central Bank President Mario Draghi, Bank of England Gov. Mark Carney, and Bank of Japan Gov. Haruhiko Kuroda.

Jerome Powell, President Donald Trump’s nominee to replace Yellen, is not among the wave of officials slated to speak, which includes St Louis Fed President James Bullard, Atlanta Fed President Raphael Bostic, and Fed Gov. Lael Brainard.
Source: MarketWatch

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