|07:00||MBA mortgage prch. index||Little change expected in latest week|
|08:30||Personal consumption||Moderate gain in nominal terms but real spending flat|
|09:45||Markit mfg PMI (final)||Another solid reading|
|10:00||ISM factory report||Highest level in over two years in February|
|10:00||Construction spending||Solid increase expected in January|
|13:00||Kaplan (FOMC voter)||On local and national issues|
|14:00||Beige book||Regional Fed surveys suggest manufacturing is strong, but services are moderate|
|Dom & imp. auto sales||Partial reversal of January decline|
|Reserve maint. period ends|
Today’s economic data are likely to have a generally strong tone. The price data in this morning’s PCE report should be encouraging enough to keep the Fed on track for a rate hike on March 15, but probably won’t create any additional sense of urgency. The ISM manufacturing index seems likely to rise to another new two-year high. February auto sales should recover from January’s temporary dip, and January construction spending is expected to post a solid gain.
Fed guidance and market pricing still seem far apart with respect to the March meeting. The Fed would probably be more comfortable with prospect of a March tightening if the market were pricing in a somewhat higher probability than it is at present, but the FOMC won’t need to see the same level of market certainty that it achieved leading up to the first two rate hikes. Separately, the Treasury finally started clearing out its enormous backlog of income tax refunds last week. While evidence of any impact on consumption patterns has been scant, we still think the extensive payment delays are likely to push some household purchases back from February to March.