Mortgages rates increased last week as a number of Fed speakers, including Fed Chair Janet Yellen, gave clear signals that the Fed is likely to increase rates for the first time in 2017 at the March 14-15 FOMC meeting. Fed speakers are on media blackout this week ahead of next week’s meeting, but gave clear signals to the market last week, with almost all speakers hinting that an increase is probable. Janet Yellen noted in her speech to the Executives Club of Chicago that full employment had been achieved and that the inflation was moving towards the 2% target. She further stated “at our meeting later this month the Committee will evaluate whether employment and inflation are continuing to evolve in line with expectations, in which case a further adjustment of the federal funds rate would likely be appropriate." These statements, alongside several Fed speakers’ similar statements last week, moved the Fed Funds Futures from a 45% probability of a March increase, to start the week, to a 92% probability by Friday.
The week ahead will have several economic releases for markets to digest with Friday’s Non-Farm Payrolls report being the headliner. The estimates for the employment figures for February are at 190k, which would be down from January but not surprising given the shorter month. Factory Orders, the January final for Durable Goods Orders, and ADP private payrolls are other releases of note to watch this week.
Economic Calendar for the week of 03/06/2017 to 03/10/2017:
Monday: Durable Goods Orders (Jan final), Factory Orders, Cap Goods Orders
Tuesday: Trade Balance, Consumer Credit
Wednesday: MBA Mortgage Applications, ADP Employment Change, Wholesale Inventories
Thursday: Initial Jobless Claims, Continuing ClaimsFriday: Non-Farm Payrolls, Unemployment Rate, Monthly Budget Statement