The Federal Open Market Committee begins a two-day meeting on Tuesday, which culminates on Wednesday at 2 p.m. New York time with the announcement on interest-rate targets and the release of in-house economic forecasts, and then with a news conference with Fed Chairman Jerome Powell at 2:30 p.m.
The FOMC in March raised its target Fed Funds Rate by 25 basis points to a 1.5%-1.75% range, having raised rates by the same increment three times in 2017, once in 2016 and one in 2015. Before that was the six-year Great Recession hiatus on target changes. The market yield on 10-year Treasury notes compared with 10-year inflated-protected Treasuries implies inflation of 2.13%.
Major economic reports out during the week:,The consumer prices on Tuesday and producer prices (final demand) on Wednesday and retail sales on Thursday, each 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.
Index of consumer expectations from the University of Michigan consumer sentiment survey, at 10 a.m. Friday.
Events arranged by day:
Tuesday: Consumer prices at 8:30 a.m. and the Treasury Budget at 2 p.m.
Wednesday: Producer prices (final demand) at 8:30 a.m., petroleum inventories at 10:30 a.m., the FOMC announcement and forecasts at 2 p.m. and Fed Chair Powell’s news conference at 2:30 p.m.
Thursday: Jobless claims, retail sales and import and export prices, each at 8:30 a.m., business inventories at 10 a.m. and the M2 money supply at 4:30 p.m.
Friday: The Empire State manufacturing survey of conditions in New York at 8:30 a.m., industrial production at 9:15 a.m., the University of Michigan consumer sentiment survey at 10 a.m. and the Treasury Department international capital report at 4 p.m.
I also keep an eye on the Baltic Dry Index, updated daily, and the 10-year implied inflation rate based on U.S. Treasury yields.
By Tim Bovee, Portland, Oregon, June 9, 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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