A Big Week for the Economy
It’ll be a week worth watching in the economy, with a newsworthy statement following the Federal Reserve meeting on Wednesday, and a second important look at the state of the economy the following day.
The Fed is not expected to raise interest rates, but officials there will comment on the health of the economy. There had been talk about the Fed raising interest rates in June, but the performance of the economy over the last few months has raised questions about whether this will happen. Fed Chairwoman Janet Yellen has said publicly that the U.S. economy has been feeling the effects of a slower global economy.
Also coming out this week are reports on durable goods, consumer sentiment, and the all-important first estimate of first-quarter Gross Domestic Product. The last of these, which will be released on Thursday, will be notable because GDP growth slowed from an annualized 3.9 percent in the second quarter of 2015 to 2 percent in the third, to 1.4 percent in the fourth. Analysts are expecting first quarter GDP to come in at just 0.7 percent, which would be a stark result, given the fact that we didn’t see the severe weather of the prior winter.
“While there are plenty of reasons to be cautious, including our Leaders Index falling to 38 in the latest reading, it’s unusual for an economy to just slowly decelerate into a recession. Typically there’s some event or catalyst to cause a recession, but anything is possible,” said Bob Hughes, senior research fellow at the American Institute for Economic Research.
