The Week Ahead: Money policy, prices, retail, housing, industry

A two-day Federal Open Market Committee meeting, with forecasts and a news conference by Fed Chair Janet Yellen, will dominate market thinking the first half the week, and responses the second half. The money policy announcement and release of the forecasts is scheduled for Wednesday at 2 p.m. New York time, with Yellen’s news conference happening at 2:30 p.m.

The high number of jobs created in have persuaded market prognosticators that the central bank will raise interest rates. But of course, only the Fedsters know for sure.

Fittingly, two inflation measures will be released before the FOMC announcement: The producer price index on Tuesday and the consumer price index on Wednesday, each at 8:30 a.m.

Other major reports: Retail sales, also on Wednesday at 8:30 a.m., housing starts on Thursday at 8:30 a.m. and industrial production on Friday at 9:15 a.m.

Leading indicators (in descending order of importance):

The interest rate spread between 10-year Treasuries and the federal funds rate, reported continually during market hours.

The M2 money supply, at 4:30 p.m. Thursday.

The S&P 500 index, reported continually during market hours.

Average weekly initial claims for unemployment from the jobless claims report at 8:30 a.m. Thursday.

Building permits for new private homes from the housing starts report at 8:30 a.m. Thursday.

The index of consumer expectations from the University of Michigan consumer sentiment survey at 10 a.m. Friday.

Events arranged by day:

Tuesday: Producer prices at 8:30 a.m.

Wednesday:  Consumer prices, retail sales and the Empire State manufacturing survey of conditions in New York, each at 8:30 a.m., business inventories and the Home Builders housing market survey, each at 10 a.m., petroleum inventories at 10:30 a.m., the FOMC meeting announcement and forecasts at 2 p.m., Fed Chair Janet Yellen’s news conference at 2:30 p.m. and the Treasury Department’s international capital report at 4 p.m.

Thursday: Jobless claims, housing starts and the Philadelphia Federal Reserve Bank’s business outlook survey of conditions in the mid-Atlantic states, each at 8:30 a.m., the job openings and labor turnover survey at 10 a.m. and the M2 money supply at 4:30 p.m.

Friday: Industrial production at 9:15 a.m. and the consumer sentiment survey at 10 a.m. In the markets, a quadruple witching day, as stock index futures and options, stock options and single stock futures expire on the same date, a conjunction that happens four times a year.

I also keep an eye on the Baltic Dry Index, updated daily, and the 5-year implied inflation rate which is the difference between the yields on 5-year U.S. Treasury notes and  5-year Treasury inflation protected securities (TIPS).

Fedsters

Aside from Fed Chair Janet Yellen’s news conference on Wednesday at 2:30 p.m., the Fed glitterati shall stay silent.

By Tim Bovee, Portland, Oregon, March 10, 2017

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