The Federal Open Market Committee meets for two days beginning Tuesday, culminating with an announcement and fresh forecasts on Wednesday at 2 p.m. New York time and a news conference with Fed Chairman Jerome Powell at 2:30 p.m.
The FOMC last raised the target federal funds rate by 25 basis points to 1.25-1.50% on Dec. 14, 2017. A year ago the committee raised rates in March 2017 following a December 2016 increase. Based on that history an increase seems more likely than not, and also totally unsurprising and well priced into the markets already.
Otherwise, the week’s focus is on real estate, with existing home sales out on Wednesday at 10 a.m. and new home sales on Friday at 10 a.m. Also hitting the Street during the week, durable goods orders on Friday at 8:30 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.
Events arranged by day:
Wednesday: Existing home sales at 10 a.m., petroleum inventories at 10:30 a.m., and the FOMC meeting announcement and forecasts at 2 p.m. and Fed Chair Powell’s news conference at 2:30 p.m.
Thursday: Jobless claims at 8:30 a.m. and the M2 money supply at 4:30 p.m.
Friday: Durable goods orders at 8:30 a.m. and new home sales at 10:30 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).
By Tim Bovee, Portland, Oregon, March 17, 2018
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.
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