Wu said this week's macro indicators and analysis: Fed holds payment innovation meeting, U.S. September CPI

Compiled by: GaryMa Wu said Blockchain

Abstract Wu discusses this week's macro indicators and analysis: Last week, Powell's dovish remarks suggested that quantitative tightening may end in the coming months, while Bank of Japan Deputy Governor Shinichi Uchida stated that if the economy and price trends meet expectations, the BOJ will continue to raise interest rates; this week, the focus is on the Federal Reserve's payment innovation meeting and the U.S. September CPI, among others.

Last week's review

Federal Reserve Chairman Powell stated in a speech that the balance sheet reduction plan may end in the coming months due to the recent strengthening of various overnight financing rates, prompting the Fed to reassess the progress of QT. Powell also warned that if Congress were to eliminate the Interest on Reserves (IOR) mechanism, the Fed might lose effective control over short-term rates, which could force it to sell a large amount of government bonds or mortgage-backed securities (MBS) in a short period, posing a threat to market stability.

The latest Beige Book released by the Federal Reserve shows that overall economic activity in the United States has been basically flat since the last report. Among the 12 Federal Reserve districts, 3 reported modest to moderate growth, 5 reported no significant changes, and 4 experienced a slight decline. Consumer spending has decreased slightly overall. Employment remains generally stable, but the demand for labor has weakened broadly, with some companies laying off workers due to weak demand and increased investments in artificial intelligence, making temporary and part-time employment a more preferred option. Wage growth has been generally moderate across regions. Prices continue to rise overall, primarily influenced by higher import costs, increased spending on services, and tariff factors.

The Deputy Governor of the Bank of Japan (BOJ), Masayoshi Uchida, stated that if the economic and price trends meet expectations, the BOJ will continue to raise interest rates and make cautious decisions based on data. He pointed out that business confidence in Japan is improving and the conditions for raising interest rates are gradually maturing, but global trade policies bring uncertainty. The BOJ raised interest rates to 0.5% in January this year, ending a decade of ultra-loose policy, and most analysts expect it to further rise to 0.75% before January next year.

Key Events & Indicators This Week October 20

China's third quarter GDP year-on-year (10:00)

October 21

The Federal Reserve holds a payment innovation conference to discuss stablecoins, artificial intelligence, and tokenization (23:30)

October 24

U.S. September unadjusted CPI YoY (20:30)

U.S. October University of Michigan Consumer Confidence Index Final (22:00)

US October one-year inflation rate expectation final value (22:00)