Along with the release of Q3 earnings by several major banks this week, the Federal Open Market Committee (FOMC) will be meeting to discuss the biggest mystery of the year: the lack of inflation in the economy.
So far, the main inner of the Fed’s monetary tightening policy has been the banking sector. Additional profits from variable loan spreads have beefed up bottom lines of several banks last quarter. With the unemployment rate at historic low levels, it will be interesting to read the FOMC meeting minutes this week as the Fed has already put a brake on its easy-money policies. However, if we see a handful of committee members concerned about low inflation, the markets may sharply react as it would put a big question mark on the proposed rate hike in December.
Last week’s edition emphasized the start of the Q4 earnings season. Click here to read more.