Retail Sales and Fed Chair Yellen’s Testimony In Focus

ssdOn Tuesday the release of retail sales for the month of June at 8:30 a.m. EST followed by Fed Chair Janet Yellen’s testimony before the Senate Banking Committee at 10:00 a.m. EST are expected to move U.S. stock markets.

The forecast for retail sales in June is expected to rise 0.7 percent, according to briefing.com, higher than May’s 0.3 percent increase that missed estimates.

Later in the morning, Fed Chair Janet Yellen will give a prepared speech about the Fed’s monetary policy and face some questioning about whether the U.S. central bank should maintain its stance of keeping short term interest rates at historic lows of .25 percent since the depths of the recession in late 2008 as the U.S. economy picks up steam, the unemployment rate has dropped to 6.1 percent, the lowest level since 2008, and inflation has moved to 1.8 percent, ever closer to the Fed’s inflation target of 2.0 percent.

In March Fed Chair Yellen admitted that interest rate increases could begin in the first half of 2015, around six months after it winds down its quantitative easing asset purchases, an earlier timeline that some economists had expected.

But Yellen has since backed down from the “first half of 2015” scenario that initially caused a stir in global markets.

During the release of the June Fed Minutes last week, the Fed Committee released a vague statement indicating the Federal Reserve will maintain the federal funds rate at the historic low of .25 percent “for a considerable time after” the QE3 asset purchase program ends in October and “some time after” the rate of inflation nears its 2 percent mandate and maximum employment is reached.”

Some other data for Tuesday morning includes Empire manufacturing, business inventory, and trade reports with export/import prices.

On Wednesday Fed Chair Yellen will speak before the House Financial Committee beginning at 10:00 a.m.

-Johnathan Schweitzer

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