United States

Light data week ahead of March 17-18 FOMC meeting

WEEKLY MARKET COMMENTARY  | 

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It’s a relatively light week of economic releases this week so price action across asset classes will likely revolve around shifting investor expectations regarding probable changes to the Federal Reserve’s policy communiqué following the March 17-18 Federal Open Market Committee meeting and the timing of the central bank’s first rate increase.

The continued strong trend in employment gains implies the economy is growing at a faster pace than gross domestic product data would suggest, thus creating a risk that the Fed may opt to begin policy normalization in June rather than later in the year. In our view, a 25 basis-point hike in the main policy rate is more symbolic than substantive and more directly a sign of growing confidence in the durability of the recovery.

Also of note this week, the U.S. Treasury will issue $24 billion in new three-year notes on Tuesday, $21 billion in 10-year notes on Wednesday and $13 billion in 30-year bonds on Thursday.

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