Market Outlook for the Week of August 29- 2 September

Aside from these events, some Fed members are also expected to deliver their remarks this week. These include Barkin, Mester, Williams and Bostic.

Fed Chair Jerome Powell delivered a direct and hawkish message Friday at the Jackson Hole Symposium and highlighted that the Fed’s primary goal is to bring inflation back to its 2% target. He suggested that it might be necessary to keep the rate higher for an extended period of time in order to ensure this.

A lot of important data for the eurozone will be released this week with August inflation taking the spotlight on Wednesday and the unemployment rate on Thursday. Inflation is expected to run hot again and this will be on everyone’s minds as the next ECB meeting is approaching.

At the Jackson Hole Symposium Isabel Schnabel warned that a larger „sacrifice” and tighter policy is required to keep inflation under control and not risk runaway price growth. She and François Villeroy de Galhau stressed that the European monetary policy would also have to remain tight for an extended period of time.

The BOJ Governor, Haruhiko Kuroda, pointed out why Japan will not tighten its monetary policy aggressively. „We have no choice other than continue monetary easing until wages and prices rise in a stable and sustainable manner,” he said, estimating that inflation in Japan will approach 3% this year but will decrease back towards 1.5% next year. The situation is a bit different in Japan compared to other developed countries, as inflation is not rising at the same aggressive pace.