Until tomorrow afternoon, debate over whether the Fed will or won’t raise interest rates again, and whether the decision is warranted, promises to dominate conversations on Wall Street. We don’t have any special insight into what’s coming, but it’s clear that Mr. Market is anticipating another 25-basis-point rise to 4.75% in Fed funds tomorrow. That, at least, is the message coming from the April contract on Fed funds.
Some pundits nonetheless think the central bank will hold steady for the time being. That’s a minority view, but anything’s possible in the 21st century.
Deciding whether the economy needs another 25-basis-point jolt is a judgment call, although even that conclusion is debatable. With that in mind, here’s a recap of some of recent numbers that will be weighing on Fed officials as the vote yea or nay. For convenience, we’ve divided our somewhat-randomly-chosen 13 economic and financial measures into two groups. The first nine, in our humble opinion, suggest another hike is in the offing, based on the 12-month trend, which isn’t always confirmed by more recent data.
In any case, the second group of four lean in the opposite direction.
Does this mean a rate hike is all but certain? The Fed will have the answer around 2:10 pm tomorrow, Washington time.
S&P 500: -0.3% (week through Mar 24)
+11.2% (12 months)
Gold: +1.1% (week through Mar 24)
+31.9% (12 months)
Crude oil: 0.1% (week through Mar 24)
+17.2% (12 months)
Producer Price Index: -1.4% (Feb)
+3.8% (12 months)
Core Consumer Price Index: +0.2% (Feb)
+3.0% (12 months)
Retail Sales: -1.3% (Feb)
+6.7% (12 months)
Industrial Production: +0.7% (Feb)
+3.3% (12 months)
New Orders for Durable Goods: +2.6% (Feb)
+7.5% (12 months)
Initial Claims for Jobless Benefits: -3.5% (Week through Mar 18)
-8.5% (12 months)
Existing Home Sales: +5.2% (Feb)
-0.3% (12 months)
New Home Sales: -10.5% (Feb)
-13.4% (12 months)
US$ (trade weighted): +0.6% (week through Mar 24)
+2.1% (12 months)
10-year Treasury Note, change in yield: +0.1% (week through Mar 24)
+5.0% (12 months)