The Fed’s Meeting Begins Today

Today is the first day of the Federal Reserve’s two-day meeting. I don’t expect much to change in the way of the Fed’s policy. However, the Fed will update its economic forecast. Most private forecasters see the economy doing much better than the Federal Reserve’s forecast. The Fed will probably close the gap at this meeting. The statement will be out tomorrow afternoon.

We had two economic reports this morning. Both were hurt by harsh winter weather. Retail sales for February fell by 3%. We also learned that industrial production fell last month by 2.2%. A recent survey by Bank of America shows that investors fear inflation and the Federal Reserve more than they do Covid. I suppose that’s a change for the better.

Unseasonably cold weather gripped the country in February, with deadly snowstorms lashing Texas and other parts of the South region. The decline in sales last month also reflected the fading boost from one-time $600 checks to households, which were part of nearly $900 billion in additional fiscal stimulus approved in late December, as well as delayed tax refunds.

Excluding automobiles, gasoline, building materials and food services, retail sales decreased 3.5% last month after surging by an upwardly revised 8.7% in January. These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product. They were previously estimated to have shot up 6.0% in January.

Posted by on March 16th, 2021 at 11:17 am


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