Events that marked the week:
Focus of the Wednesday's session was on Janet Yellen's testimony. Chair Janet Yellen said the Federal Reserve still expects to raise interest rates gradually while making it clear that continued market turmoil could throw the central bank off course from the multiple increases that policy makers have forecast for 2016. “Financial conditions in the United States have recently become less supportive of growth,” Yellen said in testimony prepared for delivery Wednesday before the House Financial Services Committee in Washington.
“These developments, if they prove persistent, could weigh on the outlook for economic activity and the labor market.” With her testimony on Wednesday, Yellen joined Vice Chairman Stanley Fischer and other senior Fed officials in declaring it’s too soon to tell whether sharp drops in stocks, oil prices and some bond yields represent passing volatility or reflect worsening global economic fundamentals that will dampen growth and
inflation in the U.S. “
The FOMC anticipates that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate,” Yellen said, repeating language from the committee’s January statement almost verbatim.
On Thursday Unemployment Claims figures were released. In the week ending February 6, the advance figure for seasonally adjusted initial claims was 269,000, a decrease of 16,000 from the previous week's unrevised level of 285,000. Analysts were anticipating increase to 287,000. The 4-week moving average was 281,250, a decrease of 3,500 from the previous week's unrevised average of 284,750. There were no special factors impacting this week's initial claims.
This week markets will be looking at:
Empire State Manufacturing Index (Tuesday 14:30)
Building Permits/Housing Starts (Wednesday 14:30)
PPI (Wednesday 14:30)
Industrial Production (Wednesday 15:15)
FOMC Meeting Minutes (Wednesday 20:00)
Unemployment Claims (Thursday 14:30)
Philly Fed Manufacturing Index (Thursday 14:30)
CPI (Friday 14:30)
