Pre-market futures are keeping in the green, following Tuesday’s big up-day, in anticipation of the Fed policy decision on interest rates, draining the balance sheet, etc. Either that or the indexes are wearing o’ the green a day ahead of St. Patrick’s Day: the Dow is +360 points at this hour, the Nasdaq is +220 and the S&P 500 is +50 points.
Retail Sales for February came in a tad light of expectations: +0.3% from +0.4% expected, though the revision from the previous month was quite large — from +3.8% originally reported to +4.9% now. Stripping out volatile auto sales for the month, we’re less than 1/4 of consensus — +0.2% versus +0.9% estimated. Year over year, this also has a big revision: from +3.3% last time to +4.4% this time.
Stripping out autos and gasoline prices, we actually see a negative number for February: -0.4%. This illustrates clearly how auto and gas sales amped up inflation metrics last month. The prior-month revision moves from +3.8% to +5.2%. And the Control number — which gets plugged into other economic reports — reached just -1.2% last month; the previous month’s revision from +4.8% to +6.7% was a huge move up. Smooth out the volatility by averaging these figures.
These January revisions are rather profound — enough so that we may see some revisions to Q1 GDP to the upside, which would be welcome. There’s no chance we’re going to see quarterly growth numbers like what was there for 2021, but that’s already baked in the cake. Better-than-expected is always preferred to the alternative.
The Import Price Index, also for February, reached lower levels on headline than expected, as well: +1.4% from the +1.6% analysts were looking for. This follows a slightly downward-revised +1.9%. Ex-fuel costs, this headline number gets cut in half: +0.7%, with a previous-month revision down to +1.3%. Exports were hotter than expected at +3.0%.
Year over year, +10.9% on Import Prices last month, up from the +10.8% reported the previous month. While quite high, these figures are off the +11.8% we saw in 2021. Exports, year over year, were +16.6% — also higher than anticipated. Again, while perhaps unnervingly high, it’s still down from the +18.3% we saw in December of last year.
But the real news of the day comes out at 2pm ET, when the 25 basis-point interest rate hike will be instituted by the Federal Reserve following its latest two-day meeting, which will have a Fed Chair Jay Powell press conference directly following. The biggest question marks are currently what the Fed intends to do about taking down the $9 trillion on its balance sheet (and how aggressively), as well as what the outlook is for future rate hikes through the remaining nine months of 2022.
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Wall Street Waits for Fed's FOMC Decisions
Pre-market futures are keeping in the green, following Tuesday’s big up-day, in anticipation of the Fed policy decision on interest rates, draining the balance sheet, etc. Either that or the indexes are wearing o’ the green a day ahead of St. Patrick’s Day: the Dow is +360 points at this hour, the Nasdaq is +220 and the S&P 500 is +50 points.
Retail Sales for February came in a tad light of expectations: +0.3% from +0.4% expected, though the revision from the previous month was quite large — from +3.8% originally reported to +4.9% now. Stripping out volatile auto sales for the month, we’re less than 1/4 of consensus — +0.2% versus +0.9% estimated. Year over year, this also has a big revision: from +3.3% last time to +4.4% this time.
Stripping out autos and gasoline prices, we actually see a negative number for February: -0.4%. This illustrates clearly how auto and gas sales amped up inflation metrics last month. The prior-month revision moves from +3.8% to +5.2%. And the Control number — which gets plugged into other economic reports — reached just -1.2% last month; the previous month’s revision from +4.8% to +6.7% was a huge move up. Smooth out the volatility by averaging these figures.
These January revisions are rather profound — enough so that we may see some revisions to Q1 GDP to the upside, which would be welcome. There’s no chance we’re going to see quarterly growth numbers like what was there for 2021, but that’s already baked in the cake. Better-than-expected is always preferred to the alternative.
The Import Price Index, also for February, reached lower levels on headline than expected, as well: +1.4% from the +1.6% analysts were looking for. This follows a slightly downward-revised +1.9%. Ex-fuel costs, this headline number gets cut in half: +0.7%, with a previous-month revision down to +1.3%. Exports were hotter than expected at +3.0%.
Year over year, +10.9% on Import Prices last month, up from the +10.8% reported the previous month. While quite high, these figures are off the +11.8% we saw in 2021. Exports, year over year, were +16.6% — also higher than anticipated. Again, while perhaps unnervingly high, it’s still down from the +18.3% we saw in December of last year.
But the real news of the day comes out at 2pm ET, when the 25 basis-point interest rate hike will be instituted by the Federal Reserve following its latest two-day meeting, which will have a Fed Chair Jay Powell press conference directly following. The biggest question marks are currently what the Fed intends to do about taking down the $9 trillion on its balance sheet (and how aggressively), as well as what the outlook is for future rate hikes through the remaining nine months of 2022.