Unravelling Rate Conundrum - Previewing Week's Main Street Events

(RTTNews) - After an uneventful period that followed the September FOMC meeting, Main Street was woken out of the reverie this week by the minutes of the meeting published on Wednesday. The minutes revealed that more and more policymakers are gravitating towards a near term rate hike.

The September 'hold' decision was a close call, with the Fed preferring to err on the side of caution, reasoning that there is still slack left in the labor force. The plot now gets thicker. Between now and the December FOMC meeting, there are two non-farm payrolls reports, a lot more first-tier data and several Fed speeches that have implications for monetary policy.

The calendar for the just concluded week was relatively light and back-end loaded. Weekly jobless claims unexpectedly remained unchanged; import and export price inflation picked up, although the annual rates are still negative.

Retail sales for September was vibrant, raising hopes for a strong holiday selling season. Auto sales remained strong, boosting the headline number. Producer price inflation report released Friday pointed to a pickup in inflation at the wholesale level. The annual wholesale price inflation rate rose to the highest level since December 2014.

On the flip side, consumer sentiment, a leading indicator for spending, fell to a 1-year low, with the weakness in the expectations component responsible for the bulk of the negativity.

The focus now shifts to the unfolding week, with manufacturing and housing data taking the center stage. The weekly Fed dose also forms part of the agenda, with a few Fed speakers taking the podium to offer their take on monetary policy.

For now, click and read RTT's take on the unfolding week's main economic data/events