PreMarket Prep: Watching The Fed On 'Briefing With Brent'

It is Monday, so it's time for another segment of “Briefing With Brent,” our weekly check-in with Brent Slava, the head of the Benzinga Pro Newsdesk.

Reading Economic Data: During his interview, Slava emphasized the importance of properly interpreting the economic data that comes from the U.S. government regarding the trajectory of inflation.

In his opinion, the Federal Reserve attempts to “be ahead of the data” and therefore relies more on where the actual data comes in compared to the estimates.

While the nominal number can be concerning, where it came in versus the actual estimates is what really matters.

Adjusted Game Plan: Slava noted that in the absence of the pandemic and excessive stimulus as part of economic policy, the Federal Reserve Bank still may be entertaining thoughts of a series of interest rate hikes.

When taking into consideration the duration of time that interest rates have been moving lower, this idea has some merit. Of course, it is impossible to know the state of the economy if the pandemic did not take place, but it is safe to assume the economy would have continued on its pre-pandemic expansion.

Slava sides with the Federal Reserve on the concept that the “factors impacting prices — a surge in spending from reopening coupled with the natural cycle of the economy” has to be digested before raising rates too fast.

The Meaning Of Transitory: Since Powell’s comments that inflation is no longer “transitory” roiled the market, Slava will search for clues during the Questions & Answer session of what that words really mean to the Federal Reserve.

In other words, was the verbiage used to enforce a much more “hawkish” stance, or is the Fed just trying to “buy some time” to and allow the supply chain shortages to work themselves through?

Be sure to stay tuned to the Benzinga Pro Newsdesk during the announcement on Wednesday at 2 p.m. EST and throughout the Q&A for insight into the Fed’s intentions fo the pace of interest rate hikes.

The full discussion with Slava from Monday’s show can be found here: