Central Bank Week has officially begun. Although the Evergrande case has been monopolizing investors' attention for a few days, the anticipation and nervousness for the announcements that could arrive in the next few days are palpable. All eyes are above all on the Federal Reserve, for the Focm meeting scheduled for 21-22 September. Expectations are also high on the meetings that will be held around the world, with Asia under special observation.
In fact, these are crucial days for international monetary policy, with the main central banks (excluding the ECB) which could announce changes in rates and purchase programs after months of liquidity injections established to deal with the economic and financial crisis triggered by the pandemic COVID-19.
WAITING FOR THE FED
The appointment is scheduled for Wednesday 22 September at 20.30 Italian time. According to analysts, the head of the Fed, Jerome Powell, could provide new indications on what the US central bank intends to do with the tapering. Last August 27th in Jackson Hole, the chairman of the Federal Reserve had anticipated that if the stars and stripes economy had continued to make progress, it would have been "appropriate to start reducing the speed of asset purchases this year", noting however that tapering "is not a direct signal of a near increase in interest rates“. Words which, according to many analysts, presaged a possible start of the reduction in purchases in the month of November, Hawks permitting. The latter, in fact, are reportedly putting pressure to leave already after this week's meeting.
"We do not expect the announcement of a tapering from the meeting, but Governor Powell should confirm the idea that an announcement will take place by the end of the year" - say the strategists of Mps Capital Services - The update of the so-called dot cloud, to see whether or not the timing of the first rate hike currently expected in 2023 will be brought forward. In addition, the rate estimates for 2024 will also be published for the first time, with the Libor futures market at 3 months that cost a rise and a half”.
THE OTHER CENTRAL BANKS
To inaugurate the week dedicated to monetary policy will be the Swedish central bank, which is expected to announce its decisions on Tuesday 21 September.
On Wednesday, September 22, the Fed will be in good company. The financial day will start very soon with the People’s Bank of China called to define the five-year (currently 4,7%) and one-year (currently 3,9%) prime rate. Decisions will follow Bank of Japan – which should confirm the current monetary policy -, while a non-monetary policy meeting of the Governing Council of the European Central Bank is scheduled for the course of the day. The day will close, in the late Italian evening, with the meeting of the Brazilian central bank.
Another day, other meetings. On Thursday 23 September the European Central Bank will publish the traditional economic bulletin. Speaking of scheduled meetings, there are those of the National Bank Switzerlandof the central bank Norwegian, of the central bank Turk and especially of the Bank of England.
