Today's economic docket includes Personal Income and Spending (which is expected to show a jump in inflation) and the Savings Rate, core PCE, Pending Sales, the Dallas Fed, and a whole lot of dovish Fed speeches. These will be analyzed under a fine toothed comb to see if any of the more dovish members are starting to become as hawkish as their brethren from last week. In the meantime, Frost-Sack will monetize another $5.5-7.5 billion in 5 year debt.
8:30: Personal income and outlays (February): Healthy growth. Strong gains in February retail sales and robust demand for motor vehicles point to a likely rise in consumer spending. We forecast an increase of 0.7% mom in nominal terms. However, the report is also likely to show evidence of firm consumer price inflation. Based on available price data from other reports, we estimate that the Personal Consumption Expenditures (PCE) price index rose by 0.4% mom. The core PCE price index likely rose by 0.20% mom, lifting the year-over-year rate to 0.9%.
Income: median forecast (of 57): +0.4%; last +1.0%.
Spending: median forecast (of 63): +0.5%; last +0.2%.
Core PCE price index: median forecast (of 40): +0.2%; last +0.12%.
10:00: Pending home sales (February): Possible stabilization. The pending home sales index – which tracks signed home sales contracts, and leads the official count of existing home sales by 1-2 months – cooled in December and January. In our view, the weakness likely resulted from inclement winter weather and some payback from strong growth earlier in Q4. Mortgage purchase applications have steadied (albeit at a low level), and we therefore agree with the consensus forecast that the pending home sales index has likely stabilized as well.
Median forecast (of 29): unchanged; last -2.8%.
10:30: Dallas Fed manufacturing index (March): High level. Like its counterparts in other regions, the Dallas Fed’s index of manufacturing activity should remain elevated this month.
Median forecast (of 6): +17.6; last +17.5.
11:00: POMO closes: Fed monetizes $5.5- $7.5 billion in 03/31/2015 – 08/31/2016 debt.
12:40: Atlanta Fed President Dennis Lockhart on the US economic outlook. Mr. Lockhart is not currently a voting member of the FOMC.
15:40: Chicago Fed President Charles Evans speaks to reporters before a speech on the economy scheduled for 16:00. Mr. Evans is a voting member of the FOMC this year.
18:00: Boston Fed President Eric Rosengren on panel discussion about “Recession and Recovery: A Forum on Smart Policies for Sustainable Growth”. Mr. Rosengren is not currently a voting member of the FOMC.
From Goldman Sachs and Zero Hedge