The Fed is expected to reduce the Fed Funds rate by 50 basis points following this week's FOMC meeting and leave the bias one of economic weakness. Recent data on inflation indicates the Fed has little to fear in this department, thus the Fed has plenty of scope to aggressively ease interest rates. Instead, Greenspan is more interested in the long-term and making sure that the government does not completely eliminate the federal debt and begin to accumulate private assets. Greenspan also noted that present economic growth is near zero-strong words for the Fed Chairman. This week, the Treasury will release its revised Q1 and preliminary Q2 borrowing needs and give details about the first quarter refunding.
Weather appears to have affected sales, particularly in the Midwest and Northeast.
This was the lowest reading since the third quarter of 1999. Both of these cost categories showed improvement from prior quarters. Initial jobless claims for the week ended January 20 were up 12,000 to 316,000. The four-week moving average fell to 336,000. Comments from the National Association of Realtors stated weather was a factor in the decline.