Incoming US employment reports and purchasing manager indices will determine whether the Federal Reserve implements an interest rate hike in September, according to Olav Chen, head of allocation and global fixed income at Storebrand Asset Management. Markets are closely watching upcoming labor data and manufacturing indicators to gauge the trajectory of monetary policy on both sides of the Atlantic.
US Economic Data and Federal Reserve Policy Expectations
Key macroeconomic releases from the United States this week will directly influence central bank decisions, according to Olav Chen of Storebrand Asset Management. Chen highlights the Institute for Supply Management purchasing manager’s index for August as a primary indicator for tracking shifts in the American economy. Strong investments tied to artificial intelligence and infrastructure development have kept the industrial sector resilient, bypassing fears of a temporary economic boost, according to Chen.
Labor market metrics will dominate the economic calendar. The Job Openings and Labor Turnover Survey, known as Jolts, provides a read on job vacancies for July, while the nonfarm payrolls report delivers figures on job creation outside the agricultural sector. The US economy lost unexpected numbers of jobs in July against expectations of new positions, while analysts project new jobs created in August, according to consensus estimates.
Federal Reserve Chair Kevin Warsh delivered a speech during the Jackson Hole economic symposium that was characterized as unexpectedly hawkish by Chen. Warsh warned that inflation of 3.7 percent remains too high and must return to the 2 percent target, prompting markets to reprice the probability of an upcoming US rate increase.
Norwegian Interest Rate Outlook and Housing Market Pressures
In Norway, Norges Bank previously kept its policy rate unchanged at 4.25 percent while signaling that further tightening may be necessary to combat inflation. Chen expects a domestic rate hike in September unless inflation figures emerge at unexpectedly low levels. Real estate association Eiendom Norge is scheduled to release monthly housing price statistics, which Chen notes have faced headwinds amid prevailing borrowing cost expectations.
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Frequently Asked Questions
When is the next US nonfarm payrolls report released?
What factors are driving US industrial resilience?
According to Olav Chen of Storebrand Asset Management, strong investments linked to artificial intelligence and infrastructure development are supporting the industrial sector.
Why is the Federal Reserve considering further rate hikes?
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