Week Ahead on Wall Street: The Fed Meeting
Between a Rock and a Hard Place
This week’s Federal Reserve meeting will mark a pivotal moment for markets navigating an increasingly complex economic landscape. While last week’s inflation data came in more moderate than some had feared, the broader outlook remains clouded by competing forces that will complicate the Fed’s decision-making process.
Uncertainty about the Trump administration’s trade policies has been persistent, pushing short-term inflation expectations higher and intensifying recession fears.
The potential for a stagflationary environment—where inflation remains elevated while growth slows—presents one of the more challenging scenarios for central banks and will require a delicate balancing act. Lower interest rates too early and inflation could accelerate; lower them too late and unemployment could rise. How Fed officials interpret these risks will likely go a long way in determining whether markets rise or fall from here.
It’s fortuitous timing then, that the Fed’s quarterly Summary of Economic Projections (SEP), an anonymous survey of Fed officials’ estimates of growth, unemployment and inflation, will be released alongside the central bank’s monetary policy decision. The SEP will also include the distribution of officials’ expectations for the trajectory of interest rates – commonly referred to as the “dot plot” – as well as qualitative assessments on the level of uncertainty and risks to growth, inflation, and unemployment.
Investors will have plenty of information to scrutinize, which introduces the possibility for meaningful surprises, and as a result, continued market volatility.
Economic and Earnings Calendar
Monday
• March Empire State Manufacturing Activity: The New York Fed’s survey of manufacturing executives in the region on business conditions and their outlook.
• February Retail Sales: This measures spending at retail stores and is a key indicator of consumer demand.
• March NAHB Housing Market Index: This index tracks how homebuilders feel about the current and future state of the single-family housing market.
Tuesday
• February Building Permits and Housing Starts: Construction data is a leading indicator of economic activity.
• February Import/Export Price Indexes: These indexes track the changes in the prices of nonmilitary goods and services traded between the U.S. and the rest of the world.
• March New York Services Activity: The New York Fed’s survey of manufacturing executives in the region on business conditions and their outlook.
• February Industrial Production and Capacity Utilization: The industrial sector accounts for much of the cyclical swings in economic activity.
Wednesday
• FOMC Interest Rate Decision: The Federal Reserve will announce any changes to monetary policy after the conclusion of its two-day FOMC meeting, in addition to providing commentary on the economy. It’s one of eight regularly scheduled meetings per year.
• Weekly Mortgage Applications: Mortgage activity gives insight on demand conditions in the housing market.
• Earnings: General Mills (GIS)
Thursday
• March Philadelphia Fed Manufacturing Activity: The Philadelphia Fed’s survey of manufacturing executives in the region on business conditions and their outlook.
• February Leading Economic Index: This is an index composed of various economic indicators that have historically led changes in the broader economy.
• February Existing Home Sales: Most home transactions in any given month tend to come from the existing market, and as a result set the tone for the broader housing market.
• Weekly Jobless Claims: This high frequency labor market data gives insight into filings for unemployment benefits. Jobless claims have continued to show a labor market that remains strong despite having cooled.
• Earnings: Accenture (ACN), Darden Restaurants (DRI), FactSet Research Systems (FDS), FedEx (FDX), Jabil (JBL), Lennar (LEN), Micron Technology (MU), Nike (NKE)
Friday
• Fedspeak: New York Fed President John Williams will deliver keynote remarks at a conference in Nassau, Bahamas.
• Earnings: Carnival (CCL)
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