An improved tone in global risk markets is pushing Treasury yields slightly higher this morning. Most major equity indices are higher on the day, albeit modestly, and S&P 500 futures are currently up 0.35%. There weren’t really any major headlines overnight, but a couple of positive earnings reports from the financial sector (Blackrock and BofA) and dovish Fed comments were received well by equity investors. Fed officials continue to express angst toward persistent, below-target inflation. Chicago Fed President Charles Evans suggested yesterday that a rate cut may be needed even if growth remains strong, and he said the Fed should “communicate comfort” with inflation moving modestly above its target. Rosengren discussed shifting away from a discrete 2% inflation target to more of a target range. “We might be forced to accept below-2% inflation during recessions, but we would commit to achieving above-2% inflation in good times,” Rosengren said in his prepared remarks. To be fair, both Rosengren and Evans are noted doves at the Fed, but the idea of average inflation targeting by the Fed has been gaining momentum this year. The Fed will host a conference June 4-5 to review all strategies, tools, and communication practices to achieve its dual mandate of price stability and full employment.

Jason Haley
Managing Director, Investment Management Group
DateEventSurv(M)ActualPriorRevised
04/15/19Empire Manufacturing810.13.7
04/15/19Net Long-term TIC Flows$51.9b-$7.2b
04/15/19Total Net TIC Flows-$21.6b-$143.7b
04/16/19Industrial Production MoM0.20%0.10%0.00%
04/16/19Manufacturing (SIC) Production0.10%-0.40%
04/16/19Capacity Utilization79.20%78.20%79.10%
04/16/19NAHB Housing Market Index6362
04/17/19MBA Mortgage Applications-5.60%
04/17/19Trade Balance-$53.5b-$51.1b
04/17/19Wholesale Inventories MoM0.30%1.20%
04/17/19Wholesale Trade Sales MoM0.30%0.50%
04/17/19U.S. Federal Reserve Releases Beige Book
04/18/19Retail Sales Advance MoM1.00%-0.20%
04/18/19Retail Sales Ex Auto MoM0.70%-0.40%
04/18/19Retail Sales Ex Auto and Gas0.40%-0.60%
04/18/19Retail Sales Control Group0.40%-0.20%
04/18/19Philadelphia Fed Business Outlook1113.7
04/18/19Initial Jobless Claims205k196k
04/18/19Continuing Claims1722k1713k
04/18/19Bloomberg Consumer Comfort59.8
04/18/19Bloomberg Economic Expectations47.5
04/18/19Markit US Manufacturing PMI52.852.4
04/18/19Markit US Services PMI5555.3
04/18/19Markit US Composite PMI54.6
04/18/19Leading Index0.40%0.20%
04/18/19Business Inventories0.30%0.80%
04/19/19Housing Starts1230k1162k
04/19/19Housing Starts MoM5.90%-8.70%
04/19/19Building Permits1300k1296k1291k
04/19/19Building Permits MoM0.70%-1.60%-2.00%