Caleb Lawrence – KPIG-KPYG Radio – Share the Wealth – March 15, 2017
The major averages opened higher ahead of the Fed’s decision on interest rates that as expected increased the Federal Funds rate from .75% to 1% with the Fed citing increasing inflation, low unemployment and economic strength in general. The markets jumped, bonds advanced and the Dollar fell in early trade, higher rates should have produced the opposite effect but this follows the theme of the last year or so.
The February Consumer Price Index or CPI advanced .1% for the month and 2.7% on a year ago basis. Almost all of the gain in this index is coming from energy prices so I would expect the March figure to show a significant reversal based on current data.
The NAHB or National Association of Home Builders index hit a 12 year high in March at 71 as the index recovered its pre-bust level. While the western region slipped 3 points it retains the highest confidence at 76.
Retail sales advanced .1% in February on strong gains in construction, home and furnishings spending. Oddly enough Bank of America reports retail sales going in the opposite direction. The Atlanta Fed has cut its 1st quarter GDPNow model again now down to just .9%, a few short weeks ago this model was forecasting nearly 3% economic growth. Also of note real or inflation adjusted wages have fallen for a second month in February on a year ago basis as per BLS or Bureau of Labor Statistics data.