Interest Rate Roundup

Monday, December 11, 2006

Heavy week for economic data; Fed to talk tough?

Not a heck of a lot going on in the markets today ... but that will change soon. The reason? It's a heavy hitting week of economic data. We have two key November inflation reports on 12/14 (import/export prices) and 12/15 (Consumer Price Index). We also get retail sales figures on 12/13 and industrial production/capacity utilization stats on 12/15. To top it all off, the Federal Open Market Committee meets to discuss interest rate policy tomorrow.

I wouldn't be surprised to see an uptick in inflation given the rebound we saw in energy prices last month. I also wouldn't be surprised to hear hawkish comments from the Fed. In this environment of abundant liquidity (see my posts about the LBO mania) AND a weak dollar, the Fed can't afford to throw more gasoline on the fire. If officials talk about easier monetary policy or downgrade their economic outlook, we could get even more asset inflation and/or dollar depreciation -- things I doubt the Fed wants to see.

FYI, has a good free site with all the dates for upcoming economic reports (and market forecasts for them). You can find it here.


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