February 26, 2020
Chief Economist Scott Brown discusses the latest market data.
In his monetary policy testimony, Chair Powell said that the Fed is a long way from achieving its inflation and employment goals. As expected, Powell downplayed concerns about higher inflation and an asset bubble. Nevertheless, long-term interest rates continued to rise, distressing stock market participants.
Personal income jumped 10.0% in January, boosted by an increase in pandemic support (checks to individuals and extended unemployment benefits) and amplified by how the numbers are reported (monthly figures at an annual rate). Consumer spending jumped 2.4%, led by an 8.4% increase in consumer durables. Spending on consumer services rose 0.7%, down 5.3% from a year ago. The PCE Price Index rose 0.3% in January (+1.5% y/y), up 0.3% ex-food & energy (+0.252% before rounding, +1.5% y/y). The core CPI rose 0.031% (+1.4% y/y).
Next week, February economic figures are likely to reflect ongoing strength. The ISM surveys should show continued growth in new orders, some pickup in employment, and input price pressures (there’s no measure of output prices, which would be useful). Friday’s job market report is expected to signal a return of job growth, following a soft patch in the last few months, but there may be some seasonal noise. The two surveys that make up the employment report should have missed the worst of the month’s poor weather. Fed Chair Powell will speak on Thursday.
IndicesLastLast WeekYTD return %
Consumer Money RatesLast1 year ago
CurrenciesLast1 year ago
|Dollars per British Pound||1.4015||1.291|
|Dollars per Euro||1.2175||1.088|
|Japanese Yen per Dollar||106.21||110.43|
|Canadian Dollars per Dollar||1.260||1.333|
|Mexican Peso per Dollar||20.853||19.281|
CommoditiesLast1 year ago
Bond RatesLast1 month ago
|10-year municipal (TEY)||1.72||1.06|
Treasury Yield Curve – 02/26/2021
As of close of business 02/25/2021
S&P Sector Performance (YTD) – 02/26/2021
As of close of business 02/25/2021
|March 1||—||Construction Spending (January)|
|—||ISM Manufacturing Index (February)|
|March 3||—||ADP Payroll Estimate (February)|
|—||ISM Services Index (February)|
|—||Fed Beige Book|
|March 4||—||Jobless Claims (week ending February 27)|
|—||Factory Order (January)|
|—||Fed Chair Powell Speaks (“conversation on the U.S. economy”)|
|March 5||—||Employment Report (February)|
|—||Trade Balance (January)|
|March 10||—||Consumer Price Index (February)|
|March 12||—||Producer Price Index (February)|
|March 16||—||Retail Sales (February)|
|—||Industrial Production (February)|
|March 17||—||FOMC Policy Decision|
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