March 19, 2020
Chief Economist Scott Brown discusses the latest market data.
As expected, the Federal Open Market Committee left short-term interest rates unchanged and did not alter its monthly pace of asset purchases. Fed officials revised their growth outlook for this year to be higher (median: +6.5% 4Q21/4Q20) and raised their inflation outlook moderately (+2.4% 4Q21/4Q20). Most Fed officials (11 of 18) still expected the overnight lending rate to remain near 0% through 2023. In his press conference, Chair Powell repeated that the Fed wants to see inflation and labor market conditions a lot closer to its goals before tightening policy. He also did not seem too concerned with the rise in long-term interest rates.
Weather was a major factor in the mid-month economic reports. Retail sales fell 3.0% in February, but with an upward revision to January (+7.6%). Taken together, retail sales for the first two months of the year were up 7.0% from the first two months of 2020. Industrial production fell 2.2%, despite a 7.4% jump in the output of utilities (cold weather), as manufacturing output dropped 3.1% (-3.8% y/y). Single-family building permits fell 10.0% in February, still up 15.0% year-over-year. We should see a significant rebound in each of the reports for March.
Next week, weather is likely to be a factor in the reports on home sales and durable goods orders. February personal spending figures may reflect some weather issues in February, but the underlying trends should be supportive of a stronger consumer outlook. Treasury Secretary Yellen and Fed Chair Powell will testify to Congress on the fiscal and monetary policy response to the pandemic, but their comments are not expected to be market-moving
|Last||Last Week||YTD return %|
Consumer Money Rates
|Last||1 year ago|
|Last||1 year ago|
|Dollars per British Pound||1.3925||1.149|
|Dollars per Euro||1.1915||1.069|
|Japanese Yen per Dollar||108.89||110.71|
|Canadian Dollars per Dollar||1.249||1.451|
|Mexican Peso per Dollar||20.486||24.031|
|Last||1 year ago|
|Last||1 month ago|
|10-year municipal (TEY)||1.75||1.25|
Treasury Yield Curve – 03/19/2021
As of close of business 03/18/2021
S&P Sector Performance (YTD) – 03/19/2021
|March 22||—||Existing Home Sales (February)|
|March 23||—||New Home Sales (February)|
|March 24||—||Durable Goods Orders (February)|
|March 25||—||Jobless Claims (week ending March 20)|
|—||Real GDP (4Q20, 3rd estimate)|
|March 26||—||Personal Income and Spending (February)|
|—||UM Consumer Sentiment (March)|
|March 30||—||CB Consumer Confidence (March|
|April 1||—||ISM Manufacturing (March)|
|April 2||—||Good Friday Holiday (stock market closed, half day for bonds)|
|—||Employment Report (March)|
|April 28||—||FOMC Policy Decision|
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