BBH: Federal Reserve to take 'wait-and-see approach'
(Kitco News) -This will be a busy week on the economic front in the U.S., with a Federal Open Market Committee meeting and number of major economic reports, including first-quarter gross domestic product, said Brown Brothers Harriman. A two-day FOMC meeting ends Wednesday. “After the recent flurry of both monetary and fiscal stimulus in the U.S., we suspect the Fed will now take a wait-and-see approach,” BBH said. “Its efforts to ‘normalize’ market segments that came under stress appear to be working.” Further, if more problems arise between meetings, the Fed has shown it will not hesitate to act as needed, BBH said. Weekly jobless claims are expected to remain high but come in at around 3.5 million, compared to 4.43 million last week, BBH said. “May is unlikely to bring any relief,” BBH added.The country gets its first look at first-quarter GDP on Wednesday. Expectations are for a contraction of 3.9%, BBH said. “While it is old news, it will give markets a taste of what’s to come in Q2,” BBH said. Yet another major report is the Institute for Supply Management’s manufacturing purchasing managers index due out Friday and expected to fall to 36.1 in April from 49.1 in March, BBH said.