The Week Ahead: Interest rates, prices, retail, housing, industry

The Federal Open Market Committee two-day meeting will culminate with an announcement and release of forecasts on Wednesday at 2 p.m., followed by a news conference with Chair Yellen at 2:30 p.m.

The FOMC in 2008 lowered its fed funds rate to a range of from 0.00% to 0.25% on Dec. 16, 2008, and kept it there for long valley of the Great Recession. The money regulators began raising rates seven years later, on Dec. 17, 2015, by a quarter point to 0.25% to 0.50%, and has since raised the target twice, at quarter-point intervals: On Dec. 15, 2017 to 0.50% to 0.75% and last March 16, 2017 to 0.75% to 1.00%.

If they were to raised rates at this week’s meeting, it would be the first break with one-year intervals in nine years. Will they or won’t they? And will the markets care?

Five economic reports of note will be published during the week: At 8:30 a.m., the producer price final demand index on Tuesday; the consumer price index and retail sales on Wednesday, and housing starts on Friday. The industrial production stats will be out on Thursday 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.

Manufacturers’ new orders for non-defense capital goods from factory orders at 10 a.m. Monday.

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

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

Events arranged by day:

Tuesday: The producer price final demand index at 8:30 a.m.

Wednesday:  The consumer price index and retail sales, each at 8:30 a.m., petroleum inventories at 10:30 a.m., the FOMC announcement and forecasts at 2 p.m. and Chair Yellen’s news conference at 2:30 p.m.

Thursday: Jobless claims, the Philadelphia Federal Reserve business outlook survey, the Empire States manufacturing survey of conditions in New York and import and export prices, each at 8:30 a.m., industrial production at 9:15 a.m., the Home Builders housing market index at 10 a.m., the Treasury Dept. international capital report at 4 p.m. and the M2 money supply at 4:30 p.m.

Friday: Quadruple witching expiration, simultaneously, of stock index futures, stock index options, stock options and single stock futures and the University of Michigan consumer sentiment survey at 10 a.m.

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

Two FOMC member makes a public appearanceS this week, New York Fed Pres. William Dudley on Tuesday, the first day of the FOMC meeting, and Dallas Fed Pres. Robert Kaplan on Friday, two days after the meeting concludes.

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

Disclaimer

Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.

No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decisions for his or her own account, and take responsibility for the consequences.

License
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All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Based on a work at www.timbovee.com.

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