@ The White House
In the morning, the President will do a round of regional television interviews with WVEC, Norfolk, Virginia; WEAR, Pensacola, Florida; KOAA, Colorado Springs, Colorado; and KIRO, Seattle, Washington.
As we definitively end America?s war in Iraq this month, the President will talk to anchors from television stations that have large military communities in their markets to discuss the enormous sacrifices and achievements of the brave Americans who served in the Iraq War, and he will speak about the extraordinary milestone of bringing the war in Iraq to an end.
The President will also discuss his efforts to extend the payroll tax cut and prevent taxes from going up on 160 million Americans.
Later in the morning, the President will deliver remarks at a campaign event in Washington, DC.
@ Wall Street
FOMC Announcement
The FOMC gathers for its final meeting of this tumultuous year. Data points on the U.S. economy since the early-November meeting have been generally encouraging about the pace and sustainability of the recovery, despite the debt turmoil in Europe. As a result, the majority of committee members are expected to vote for maintaining the existing policy stance ? on interest rates and the balance sheet ? but without any additional accommodation. This means that the 0-25 bps Fed Funds target through mid-2013 will be reaffirmed, while the extension of the balance-sheet duration (Operation Twist) will continue at the agreed-upon pace.
There is some thinking that the Fed could lower the discount rate following its move to bolster dollar funding for Eurozone banks this month. However, this possibility should be discounted as U.S. banks do not currently face the same funding challenges as their European counterparts, and the Fed will be careful to not needlessly worry markets.
Meanwhile, any decision to expand the balance sheet with additional purchases of mortgage-backed securities, something mentioned at last month?s press conference, will be deferred until next year, though IHS Global Insight thinks this is likely to occur eventually.
Plans to enhance Fed communication, perhaps with numerical interest rate forecasts or guidance on the ?mid-2013? promise, are also in the works, but won?t be decided on by this week.
Otherwise, the Fed isn?t scheduled to release updated numerical forecasts and Chairman Bernanke will not hold a press conference.
Retail Sales (Nov.)
We expect an overall increase of 0.5% in November retail sales, and a 0.4% advance ex-autos. Sales at auto dealers should increase as light vehicle sales rose to 13.6 million units from October's 13.2 million units. Non-auto sales should benefit from relatively strong growth across the board, except for gasoline stations and electronic stores. Building materials and garden supply stores should increase due to relatively warm weather, and retail sales used to estimate personal spending (total retail sales less autos, less building materials, less gasoline) are expected to increase a robust 0.8% as shoppers have been starting their holiday shopping early. Analysis of the weekly ICSC (International Council of Shopping Centers) chain store sales data provides significant evidence that consumers held back before Black Friday, in anticipation of the sales promotions and discounting. Gasoline prices have been declining, and electronic stores should take a hit since October's sales were very high due to the introduction of the latest Apple iPhone.
Our holiday sales forecast now stands at 5.0%, compared to last year. Holiday sales are defined as not seasonally adjusted November plus December total retail sales, less autos, less gasoline, less food services, and less non-store retailers. Last month, our holiday retail sales stood at 4.2% higher than last year. However, there has been some relatively good news
