By Noreen Burke

Investing.com -- Against a background of a resurgence of the coronavirus pandemic the main U.S. economic data in the coming week will be the reports on consumer and producer price inflation. Investors are watching closely for clues on how soon the Federal Reserve may start scaling back stimulus. There are also several Fed officials slated to speak during the coming week and their comments could help clarify the Fed’s position on tapering. Earnings will continue but will be fewer in number as earnings season winds down. Meanwhile, Bitcoin is hovering near two-month highs and the UK is to release data on second quarter growth. Here’s what you need to know to start your week.

Inflation numbers

The U.S. consumer price index and the producer price index released Wednesday and Thursday, respectively will provide an insight into the current pace of inflation, one of the key factors along with the labor market, that the Fed looks at when making its monetary policy decisions.

CPI is expected to moderate slightly after last month’s jump of 0.9%, the strongest gain since June 2008. The Fed has said the current surge in inflation is just temporary, but market sentiment has been hit by fears of higher inflation resulting in a sudden tapering.

Friday’s stronger-than-expected nonfarm payrolls report was the last before the Fed gathers for its annual meeting in Jackson Hole, Wyoming, at the end of the month to discuss policy and decide future stimulus strategy.

The upbeat jobs numbers coupled with uncomfortably hot inflation data could prompt Fed officials to announce plans to begin tapering bond purchases as soon as September, the first step down the road to eventual interest rate hikes.

Fedspeak

Several Fed officials are due to make appearances in the coming week including Atlanta Fed President Raphael Bostic and Richmond Fed head Thomas Barkin on Monday, Chicago Fed President Charles Evans on Tuesday and Kansas City Fed President Esther George on Wednesday.

Bostic and Barkin are known to lean towards tapering so their comments will be closely watched.

The bar the Fed set for scaling back its bond-buying program - "substantial further progress" toward the Fed's 2% inflation and full employment goals - has never been precisely defined.

In June officials began debating how soon the central bank can begin to ease back on its emergency supports for the economy even amid the emergence of the Delta variant of the coronavirus that threatens to dent growth.

Earnings wind down

Earnings will continue in the coming week, but the number of companies reporting will tail off as earnings season continues to wind down.