Despite the strong job market here in the U.S., banking and lending giant Wells Fargo plans on cutting up to 26,500 jobs, or 10% of its workforce, over the next three years. The bank said that the move into digital banking and the firm's efficiency programs would result in the layoffs along with normal attrition. The plans come as the U.S. economy is on the upswing, the labor market tight and as rival JPMorgan Chase announced plans to open more branches.
Next week, the U.S. financial markets have several hurdles to jump over, which comes as the Dow, S&P and NASDAQ Stock indices are at all-time highs. The two-day Fed meeting kicks offs on Tuesday with the monetary policy statement being released on Wednesday at 2:00 p.m. ET. There will be a hike to the Fed Funds Rate, which is most likely already priced in but the statement has the potential to move the markets. The week will also feature the Fed's favorite inflation gauge, the Core PCE, which could also shake up the markets. The final read on second quarter Gross Domestic Product will be released.
Fannie Mae released its September Economic and Housing Outlook showing that Gross Domestic Product in the third quarter of this year is estimated to be 3.2%. Fannie Mae said there will be an expected slowdown in consumer spending and business fixed investment growth. On the housing front, Doug Duncan from Fannie Mae said, "We expect housing to be a drag once again this quarter. But in a welcome development, some construction material prices have softened, which should help builders to continue to build smaller or less expensive homes most in demand from potential first-time homebuyers. Additionally, the crunch on for-sale inventories of existing homes has eased slightly, hopefully setting up an improvement in the housing market next year.”