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By Noreen Burke
Investing.com -- It’s set to be a busy week in the markets with the Federal Reserve meeting, a series of high-profile earnings and some key economic data on the slate. While no policy changes are expected from the Fed’s two day meeting more details will likely emerge on the tapering discussions that started in June. With equity markets poised at record highs investors will be closely watching earnings from tech heavyweights and on Thursday investors will get a first look at second quarter U.S. GDP growth, which is expected to be the peak of the post-pandemic recovery. Meanwhile, on Friday the euro zone is to release a slew of data, including reports on inflation, GDP and unemployment. Here’s what you need to know to start your week.
Fed taper talk
The Fed wraps up its two-day meeting on Wednesday and its statement will be scrutinized for any mention of the timeframe for tapering its asset purchase program, although Chairman Jerome Powell made it clear in his recent testimony to Congress that the U.S. economy still needs the central bank's full support.
In June, policymakers began debating when to start cutting monthly purchases of $120 billion of Treasuries and mortgage-backed securities.
Powell may indicate that while a discussion on tapering has started, there is still time before officials reach a conclusion on what they will do. Policymakers are expected to highlight the risk from the rapidly spreading Delta variant, which investors worry could derail the economic recovery.
Most analysts expect the Fed to give a clearer indication of its plans for scaling back its quantitative easing program at its annual conference in Jackson Hole, Wyoming, in late August, before a formal announcement on tapering later in the year.
Data dump
Aside from the Fed meeting, investors will get an update on the strength of the U.S. economy with an end-of-month data dump.
Monday sees figures on new home sales, which are expected to hit new highs, followed by durable goods orders and consumer confidence on Tuesday.
The highlight is on Thursday with a first look at second quarter GDP and while expectations have been trimmed back in recent weeks, growth is still expected to be strong at 8.6% annualized. This would mark the recovery of all the lost output caused by the pandemic and could be the peak of the post-pandemic recovery.
Figures on personal income and spending are due Friday, which include the Fed’s rumored favorite measure of inflation – the core personal consumer expenditure price index.
Earnings deluge
U.S. earnings are kicking into high gear and investors will be watching the largest tech names to gauge whether a recent shift away from reflation trade and into growth stocks that led markets for the last decade will continue.