Economic News

[Rod]

The Fed's next FOMC meeting is on Mar 20 & 21.

http://www.federalreserve.gov/calendar.htm

 

[Oldcoin]

Thanks for your reply OldCoin. Looks like the market is also trying to sort it out. Was the bond market wrong to let rates go so low? The Fed either has to ease or bond yields need to go higher. Any thoughts?

You know sometimes I don’t get the bond market. If they are factoring in a Fed rate cut based on the housing market, it’s not going to happen. The Fed is primarily focused on inflation and until the numbers fall within their comfort range we aren’t going to see a decrease. I don’t think we’ll see an increase either; that could put the economy into a nose dive that would force them to cut, even if inflation is up. So my bet is on them holding rates steady. It may take them longer to achieve their inflation goals but it won’t have the negative impact overall. IMHO

 

[tsptalk]

You know sometimes I don’t get the bond market. If they are factoring in a Fed rate cut based on the housing market, it’s not going to happen.

I always think of the bond market as the smart money when comes to reacting to the economic data. This big bounce in yields today tells me you are right, they were focusing more on the housing market and not inflation. Today's jobs report may be their wake up call. Thanks again.

 

[Oldcoin]

THE FED
Fed must pay attention to inflation expectations: Kohn

http://tinyurl.com/38nb74

WASHINGTON (MarketWatch) -- Expectations about future interest rates and inflation are "critical to policy success," Federal Reserve Vice-Chairman Donald Kohn said Friday.

Speaking at a forum on monetary policy sponsored by the University of Chicago and Brandeis University business schools, Kohn rejected the conclusions of an academic paper presented at the forum that suggested that expectations of inflation are not a good guide to future inflation.
Fed policymakers often say they are as concerned about inflation expectations as they are about actual prices. Changes in inflation expectations can lead to changes in actual prices, as people and institutions make plans and bargain over wages and prices. If they think inflation will be higher, that becomes a self-fulfilling prophecy.

If policymakers have no idea about where inflationary trends are heading, they can only react to what's already happened, sometimes with disastrous results. Changes in inflation rates lag behind changes in the economy

 

[Oldcoin]

The week starts off quietly with no significant reports due out on Monday. But we ramp up rather quickly with the Retail Sales report due on Tuesday before the market opens; this report rates an A- for importance. Wednesday we quiet down again and end the week with a bang in the form of PPI reports, Initial Claims and the NY Empire State Index on Thursday. On Friday CPI reports with the preliminary Mich Sentiment reports.

http://biz.yahoo.com/c/ec/200710.html

http://www.nasdaq.com/asp/econodayframe.asp?page=http://www.nasdaq.com/econoday/index.html

Not much going on in the Who’s Speaking category, on Tuesday we have Edward Lazear Council of Economic Advisers Chairman speaking. His home page http://faculty-gsb.stanford.edu/lazear/index.html he’s been on the job for a year with the Bush administration. I don’t expect him to rattle the ship. Link to his latest interview http://www.usnews.com/usnews/biztech/capitalcommerce/070302/probing_the_mind_of_bushs_econ.htm

Also speaking Tuesday is Treasury Secretary Henry Paulson. On Thursday OPEC is meeting

Earnings for the week is at http://www.briefing.com/Investor/Private/MarketAnalysis/Calendars/EarningsCalendarWeek3.htm

Of note is Goldman Sachs, Bear Sterns and Lehman Bros.

 

[Oldcoin]

I’m a little late with this item this a.m., seems daylight savings is taking a toll on my old body. I’m thinking it takes me about two weeks and lots of coffee to shake off the effects.

Feb retail sales weaker than expected
Tue Mar 13, 2007 9:42AM EDT

http://tinyurl.com/ywud66

Also business inventories came in line with what was forecast. I also notice that another subprime lender is maneuvering to head off the inevitable collapse in that market. New Century trading was suspended by the NYSE today but Accredited Home lenders needs a loan……maybe noting down with a special interest rate for the first 90 days at 150% of the value of the property!

http://www.bloomberg.com/apps/news?pid=20601087&sid=arzAuqxJtj54&refer=home


Need more coffee

 

[Oldcoin]

ECONOMIC REPORT
Inventories building up again in January
Inventory-to-sales ratio matches two-year high with 40 days' of sales in stock

http://tinyurl.com/2rusmb

 

[clester]

I've got a bad feeling about the consumer. Its going to be a long summer.

 

[Oldcoin]

Bernanke, Greenspan Disagree on Impact of Corporate-Profit Peak

http://www.bloomberg.com/apps/news?pid=20601109&sid=a_3NewFCHPQ0&refer=home

They are saying the chance of a Recession is 20% by the end of the year. I’ve also read some economist estimate the chances at 50%.

 

[Oldcoin]

http://www.financialsense.com/editorials/kasriel/2007/0313.html

THREE QUARTERS OF BELOW

POTENTIAL GROWTH AND COUNTING
by Paul L. Kasriel

Senior Vice President & Director of Economic Research
The Northern Trust Company

March 13, 2007

 

[Oldcoin]

U.S. Economy: Import Prices May Contain Inflation (Update1)
By Courtney Schlisserman

March 14 (Bloomberg) -- Prices of U.S. imports rose less than forecast in February, held down by lower costs for metals and machinery that may help keep a lid on inflation.

http://www.bloomberg.com/apps/news?pid=20601087&sid=az.lbAsv.dTs&refer=home

 

[Oldcoin]

I did not post this on my earlier post of who’s speaking. Michael Moskow is speaking today at 12:30 PM ET. He’s going to talk about the U.S. economic outlook.

The risk of high inflation is still greater than the risk of economic growth falling too low, Moskow said in comments to the Jewish United Fund similar to his most recent speech last month.

It will be interesting to see if he carries on the same line from last month. Without much direction in today’s market traders may key into what he has to say. Making matters worse, he’s talking after 12:30 ET.

 

[Oldcoin]

Economic Monitor – Weekly Commentary

by Dr. Scott Brown

Fed Policy Outlook: Still Inflation Risks

Federal Reserve officials will meet next week to set the course of monetary policy. Once again, there is absolutely no suspense about what the Fed will do – that is, leave short-term interest rates unchanged. Rather, the key question is what will be said in the policy statement. While there are both upside and downside risks to the growth outlook, Chairman Bernanke has signaled that the Fed sees higher inflation as “the predominant risk.” Hence, the Fed is likely to retain its small bias to tighten. The financial markets had priced in Fed rate cuts in late 2006, only to price them out in early 2007. The recent correction in share prices has once again led the markets to price in Fed rate cuts. More likely, the Fed will remain on hold for many months.
http://www.raymondjames.com/monit1.htm

 

[weatherweenie]

[BRIEFING.COM] S&P futures vs fair value: -0.2. Nasdaq futures vs fair value: -0.5. Futures trade spikes lower following economic data, now suggesting a slightly lower start for the cash market. Total PPI unexpectedly jumped 1.3% (consensus 0.5%) in February. The more closely-watched core rate rose 0.4% (consensus 0.2%), prompting a knee-jerk reaction in equities but bonds have basically shrugged off the report so far in anticipation of tomorrow's more influential CPI report to provide a clearer read on inflation. The March NY Empire State Index plunged to 1.9 (consensus 17.0); but today’s Philly Fed survey will hold more influence. Initial claims fell 11K to 318K (consensus 325K).

 

[Oldcoin]

U.S. Producer Prices Rise 1.3%; Core Rate Rises 0.4% (Update2)

By Shobhana Chandra

March 15 (Bloomberg) -- Prices paid to U.S. producers rose in February by the most in three months, boosted by higher costs for energy, cigarettes and toys.

The 1.3 percent gain, which exceeded forecasts, followed a 0.6 percent decline in January, the Labor Department said today in Washington. So-called core prices that exclude fuel and food rose 0.4 percent, double the increase in January

http://www.bloomberg.com/apps/news?pid=20601087&sid=a_3iCBiSCHIA&refer=home

 

[Oldcoin]

ECONOMIC REPORT

Jobless claims decline 12,000 to 318,000
Smoothed level of continuing claims remains at one-year high

WASHINGTON (MarketWatch) - The number of Americans applying for unemployment benefits fell by 12,000 last week to 318,000, the lowest in five weeks, the Labor Department reported Thursday.

The four-week average of initial claims - considered a better gauge of underlying conditions in the labor market because it smoothes out temporary distortions such as weather or holidays - fell by 10,250 to 329,250 after hitting a 17-month high of 339,500 the previous week.
There were no special factors affecting claims this past week, a Labor Department spokesman said.

Meanwhile, the number of Americans collecting unemployment checks in the week ending March 3 increased by 48,000 to 2.58 million. The four-week average of continuing claims edged up by 5,500 to 2.56 million, the highest since January 2006.

http://tinyurl.com/2hpho3

 

[Oldcoin]

ECONOMIC REPORT
New York factory activity comes to a standstill
Empire State index plunges to 1.9, the lowest since May 2005

WASHINGTON (MarketWatch) -- Manufacturing activity in the New York area came to a virtual standstill in March, the New York Federal Reserve Bank said Thursday.

http://tinyurl.com/2dbqw4

 

[tsptalk]

U.S. Producer Prices Rise 1.3%; Core Rate Rises 0.4% (Update2)

By Shobhana Chandra

March 15 (Bloomberg) -- Prices paid to U.S. producers rose in February by the most in three months, boosted by higher costs for energy, cigarettes and toys...

There goes the interest rate cut. That's more than double expectations. Both stocks and bonds should suffer from that, at least temporarily.

 

[tsptalk]

Both stocks and bonds should suffer from that, at least temporarily.

Well, that sure was a temporary dip.

 

[clester]

It seems to me the biggest risk is for recession. So, the Fed can't raise rates. I don't think the economy is in as good a shape as the talking heads say it is.