Evans, Williams and Williams.
That's who's up today – all doves. Tomorrow it's Evans, Bullard, Bostic, Bullard – so we're turning hawkish after 9am. Williams (dove) again on Wednesday at 5pm and again Thursday morning, followed by Harker, Evans and Bullard – so now we're mixing things up and the last word goes to Harker (hawk) on Friday morning.
Since there are far more haws than doves on the Fed at the moment but the doves are getting the majority of the speaking time – it's pretty clear which face the Fed is trying to present but it's interesting that they're "experimenting" with Bullard having the verys last word on Tuesday without anyone to negate him all day Wednesday.
That means there's a good chance we have a sell-off Tuesday into Wednesday and the Nasdaq is already plunging this morning and everything has been going downhill since China's open as now power cuts due to electricity shortages are getting bad enough to affect both demand and the factories ability to produce goods (China's PMI will be out Thursday morning – hence the doves coming back to save us). China International Capital Corp. estimated the electricity shortages will lower the country’s growth rate by 0.1 to 0.15 percentage point in the third and fourth quarters. Nomura Holdings Ltd. cut its full-year forecast for gross domestic product, while Morgan Stanley warned of lower fourth-quarter output.
The stringent measures to cut electricity use in economic powerhouses like Jiangsu, Zhejiang and Guangdong provinces will probably cause the purchasing managers index, scheduled for release later this week, to drop below 50, Nomura said in a report Monday. Nomura’s Chief China Economist Lu Ting said there’s now a chance that its growth projection for 2021 — which was cut on Friday to 7.7% from 8.2% — could be lowered further.
CICC economists said the power supply shock will have a large impact on short-term production, especially in September, with industrial output growth in the month likely dropping to 4%-4.5%. CICC also sees an impact on inflation, with producer prices likely to rise at least 9% in 2021 from a year earlier, weighing on the profitability of downstream firms. Monetary policy will likely stay neutral with an easing bias, CICC economists said.
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