@ The White House
In the morning, the President will meet with senior advisors in the Oval Office.
Later in the morning, the President will meet with Prime Minister Netanyahu in the Oval Office. The meeting will be an opportunity for the President to reaffirm the unbreakable bond between the United States and Israel, and to discuss a range of strategic issues of mutual concern.
In the afternoon, the President will attend an expanded lunch meeting with Prime Minister Netanyahu.
Later in the afternoon, the President will meet with Secretary of the Treasury Tim Geithner. After, the President will meet with Secretary of Defense Leon Panetta in the Oval Office.
@ Wall Street
The Fed was front and center last week. From the latest Beige Book report, we learned that committee members are receiving upbeat news from their regional business contacts. The report ? covering mid-January through February ? included anecdotal information that the economic recovery was firmly on track during the first months of 2012. The most significant addition to the report was that for the first time since the end of the recession, housing was said to have improved in most districts. Otherwise, consumer demand was generally healthy, although mild weather hurt sales of winter clothing and other seasonal items. Nevertheless, most at the Fed believe that the pace of economic growth is expected to be modest and unemployment high this year.
What does this mean for policy? Currently, there are no plans either to scale back the forward rate guidance (and raise rates early) or to initiate QE3 at this time. During his latest testimony to Congress, Federal Reserve Chairman Ben Bernanke remained somewhat skeptical that the economy has entered a stronger growth phase and pointed out important caveats to recent improvements in the data. In doing so, Bernanke tried to establish that recent declines in the unemployment rate are not sufficient to warrant rethinking of the Fed?s policy stance at this time.
This past week (February 27 ? March 2) was a heavy one with regard to data, and taken together, the news was generally upbeat though there were a few negatives. Fourth-quarter Real GDP growth was unexpectedly revised upward, from 2.8% to 3.0%. Other than stronger final sales than first estimated, the biggest news in the report was an upward revision to private wage and salary growth in the final two quarters of 2011. The revised figures paint a healthier picture of consumer finances and lend more reason to believe that consumers can withstand the headwinds brought on by rising gasoline prices.
Personal income rose 0.3% in January, while spending rose 0.2%; upward revisions to December show the saving rate higher than initially thought. Consumer confidence surged in February after January?s dip and is at the highest level in a year. And despite higher gas prices, motor vehicle sales breezed past expectations in February, notching 15.0-million units SAAR. Not all of the data were rosy, however. Durable goods orders plunged 4.0% in January, though plummeting aircraft orders overstated the decline. Home prices fell again in the S&P/Case-Shiller Index for December; the 20-city composite index was down 4.0% y/y, a decade-low. The ISM Manufacturing Index eased to 52.4 in February on a drop in vendor performance, which measures supplier backlogs. Construction spending fell in January, but upward revisions to November and December should have positive growth implications.
February?s employment report will be the highlight of the upcoming week (March 5 ? 9), and another strong set of payroll figures is expected: 220,000 jobs added, with a token decrease in the unemployment rate (to 8.2%). This would be consistent with the data on initial unemployment insurance claims, which have declined steadily, and recent evidence of labor market optimism from consumer surveys. Thanks to higher exports a