Week ahead: Fed minutes, Jay Powell, Sun Valley

Week ahead: Fed minutes, Jay Powell, Sun Valley

The Federal Reserve is prepared to release minutes from its last meeting, and chair Jay Powell is due to appear on Capitol Hill in a busy week for investors searching for interest rate clues.

Here is what to watch in the coming week:

Federal Reserve

The Fed will probably be the main attraction on Wall Street, particularly after a surprisingly strong US jobs report quelled expectations for a big rate cut at the end of this month.

The central bank on July 10 will release minutes from its last meeting, where officials voted to hold rates steady. Investors were increasingly looking for the Fed to lower interest rates by as much as a half percentage point at its next meeting in late July, an outlook that has helped US stocks reach all-time highs this week. A quicker pace of hiring last month, as seen in Friday’s jobs report, has the market betting on a smaller rate cut of 25 basis points.

The minutes should give investors more insight into deliberations at the Fed’s meeting, as traders look for further clues on what officials are thinking heading into the next rate decision. Chair Jay Powell said in a recent speech “an ounce of prevention is worth more than a pound of cure”, a hint that the Fed may lean toward a so-called insurance cut to head off a potential economic slowdown.

Fed speakers

Investors will hear from Mr Powell himself several times in the coming week. He is scheduled to give remarks on July 9 at the Federal Reserve Bank of Boston, followed by the first of two days of congressional testimony to discuss the Fed’s semi-annual monetary policy report.

Other Fed officials are also set to offer commentary on the US economy and central bank. The list of speakers includes St Louis Fed president James Bullard, Atlanta Fed president Raphael Bostic, Fed vice-chair for supervision Randal Quarles and New York Fed president John Williams.

Mr Bullard, known as one of the more dovish members of the policy-setting committee, was the lone dissenting vote at the Fed’s June meeting.

Sun Valley media summit

Investment bank Allen & Company’s annual Sun Valley Conference will bring together some of the most influential figures in media. The event, which begins July 9 at a resort in Sun Valley, Idaho, has been known to be fertile soil for dealmaking.

In past years, media and entertainment moguls including Fox’s Rupert Murdoch, Amazon’s Jeff Bezos, Apple’s Tim Cook, Walt Disney’s Bob Iger and Netflix’s Reed Hastings have attended.

UK leadership race

The race to replace Theresa May as prime minister will continue next week. Boris Johnson and Jeremy Hunt, the final two candidates, will participate in a televised debate on July 9 as members of the Conservative Party begin to vote.

Economic data and earnings

Key economic reports in the next week will cover US inflation, UK gross domestic product and Chinese trade data.

In corporate news, soda and snack giant PepsiCo will headline the list of earnings reports. Delta Air Lines, Bed Bath & Beyond, Levi Strauss and Japan’s Fast Retailing are also due to release financial results.

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