The Federal Reserve takes center stage this week.
On Tuesday, members of the Federal Open Market Committee (FOMC) will kick off two days of meetings. Fed Chairman Jerome Powell will hold a press conference at the meeting’s conclusion on Wednesday to announce whether or not the central bank decided to raise short-term interest rates.
Market watchers will be looking for clues on the the central bank’s future monetary policy path, as well as when it plans to complete its balance sheet normalization.
Consensus among economists remains that the Fed will leave interest rates unchanged following this week’s meeting. Powell previously indicated that the Fed would take a “patient” stance as it assesses cross currents. Since those statements, the economic data has been painting a mixed picture.
“The more interesting development will be what the ‘dot plot’ signals about their intentions for the rest of the year,” JPMorgan economist Michael Feroli wrote in a note on Friday. “We suspect the median dot moves down from the two hikes they signaled in December to either no hikes or one hike for this year. We see somewhat higher odds of zero than one.”
UBS economist Seth Carpenter anticipates that the Fed’s patient theme will continue this week. “While the FOMC continues to see a relatively robust US economy, various members are seeing increasing downside risks to the outlook. In his recent comments, Chairman spent considerable time discussing downside risks to the economy and the inability of modal forecasts to properly reflect those risks,” Carpenter wrote in a note on Monday.
Furthermore, Carpenter is expecting the Fed to clarify its balance sheet plans at this meeting. “In testimony and elsewhere, Chairman Powell has said that the Fed is prepared to make an announcement "soon" about exactly when, later this year, they will stop shedding assets from the portfolio. We think that announcement happens at this meeting.”
Economic calendar
Monday: NAHB Housing Market Index, March (63 expected, 62 prior)
Tuesday: Factory Orders, January (0.3% expected, 0.1% prior); Durable Goods Orders, January (0.4% prior); Durables Goods excluding Transportation, January (-0.1% prior); Capital Goods Orders Non-defense excluding Air, January (0.8% prior)
Wednesday: MBA Mortgage Applications, week ending March 15 (2.3% prior)
Thursday: Philadelphia Fed Business Outlook, March (6 expected, -4.1 prior); Initial Jobless Claims, week ending March 16 (225K expected, 229K prior); Continuing Claims, week ending March 9 (1.776 million prior); Bloomberg Consumer Comfort, week ending March 17 (60.8 prior); Leading Index, February (0.1% expected, -0.1% prior)
Friday: Markit US Manufacturing PMI, March (54 expected, 53 prior); Markit US Services PMI, March (56.5 expected, 56 prior); Markit US Composite PMI, March (55.5 prior); Wholesale Inventories month-on-month, January (0.1% expected); Existing Home Sales, February (5.10 million expected, 4.94 million prior); Wholesale Trade Sales month-on-month, January (-1.0% prior); Existing Home Sales month-on-month, February (3.2% expected, -1.2% prior)
Earnings calendar
Monday: Del Taco Restaurants (TACO), Tilray (TLRY) after market close
Tuesday: FedEx (FDX) after market close
Wednesday: General Mills (GIS) before market open; Micron (MU), Williams-Sonoma (WSM) after market close
Thursday: ConAgra Brands (CAG), Darden Restaurants (DRI) before market open; Nike (NKE) after market close
Friday: Tiffany & Co (TIF)
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Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.
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