Major U.S. Data to Be Released This Week, Expected to Strengthen the Case for a Fed Rate Hike in October

Several key economic data due this week are expected to further show that the US economy is strengthening, providing more support for the argument by several Federal Reserve officials that interest rates should be raised further. Recent data showed that US retail sales grew in August and business activity expanded in September at the fastest pace in more than five years, which in turn fueled market expectations that the Fed could raise rates again as soon as October. But the good news on economic growth comes with a cost: inflation remains above the Fed's 2% target, forcing the central bank to consider raising rates again and putting further pressure on households and businesses. Earlier this month, the Fed had just raised rates for the first time in three years. Adding to the tension, the Fed's next interest rate decision will be announced just days before the closely watched midterm elections.