This week is slated for releases, both national and regional, which will impact the fixed income markets. One of the most important events from a fixed income investor’s perspective will be Janet Yellen’s testimony to the Senate Banking Committee on Thursday. The Fed Chair will talk about the outlook for the U.S. economy and monetary policy. Markets will eagerly watch for indications in the speech that hint at changes in the Fed’s stance with respect to the economic stimulus program in light of recent economic data which has mostly fallen short of expectations.
The week starts with the release of the Chicago Fed National Activity Index (or CFNAI) and the Texas Manufacturing Outlook Survey (or TMOS) issued by the Dallas Fed on Monday, February 24. This will be followed by the Federal Reserve Bank of Richmond’s Fifth District Survey of Manufacturing Activity and the Federal Housing Finance Agency’s Housing Price Index (or HPI) releases on Tuesday. Two housing indicators will be released on Wednesday: the Mortgage Bankers Association Purchase Applications Index; and new home sales issued by U.S. Department of Commerce, Census Bureau. The Kansas Fed’s Survey of Tenth District Manufacturers will be released on Thursday.
Friday will see two major releases: the gross domestic product (or GDP) for the last quarter of 2013; and the Pending Home Sales Index. The GDP release will have important implications for economic growth and the future direction of the Fed funds rate.