What We Learned Last Week
- Minutes from the latest Federal Open Market Committee (FOMC) meeting underscored two tactics for rate hikes: (1) start sooner and move more slowly, or (2) be patient and move more quickly later, hoping to gain more clarity on the global risks and cutbacks in the US energy sector. The majority of policymakers appear to favor the latter approach.
- Energy businesses are cutting back, judging by the rise of jobless claims in Texas and other areas where energy has an outsized footprint. However, judging by the low and steady level of jobless claims, the economy as a whole is doing well.
- The latest Greek crisis was not about whether to exit from the European Monetary Union. Greece agreed to a conditional deal with Europe to secure a four-month extension beyond the February 24 hurdle of its current bailout.
- Resolution of labor negotiations between the International Longshore and Warehouse Union and Pacific Maritime Association last Friday averts a potentially disruptive shutdown.
What We Expect to See in the Week Ahead
- This week, Fed Chair Janet Yellen will report on the state of the economy to Congress in a highly anticipated appearance.
- This week’s reports—consumer prices, durable goods and revisions to Q4 real gross domestic product (GDP)—likely aren’t going to be indicating that the Fed is behind any curves.
Download the full report (PDF)