Ten days after Fourth of July, the fireworks continue with the testimony of new Federal Reserve Chairman Kevin Warsh before the House Financial Services Committee (July 14) and the Senate Banking Committee (July 15.) The central bank is required to provide commentary and answer questions from lawmakers twice a year, though the dates are flexible — and it is possible that the Senate will alter its schedule in light of Senator Graham’s sudden death. Chairman Warsh’s appearance is likely to be one of those “when an unstoppable force meets an immovable object” experiences; markets will be fixated on the sparring while ultimately learning nothing about what comes next. Less certain is what will happen with renewed fighting in the Persian Gulf. To say oil and gas prices will be volatile is to say nothing, with the real question being the trajectory around which the volatility occurs. Despite the recent rapid decline of oil prices to a pre-conflict level as a result of the temporary surge in supply, those supplies are now under threat again and expected to remain under threat for an extended period. None of this, of course, is making the Federal Reserve’s job any easier, or the near-term outlook for inflation any clearer.
Data to Watch
- US Consumer Price Index (CPI) for June, released Tuesday, July 14
- Federal Reserve Chairman Kevin Warsh testimony to Congress, July 14 and 15
- US Pending Home Sales for June, released Thursday, July 16 (and Housing Starts for June released on Friday, July 17)
