- Janet Yellen, Fed's chairman
Fundamental data over the past couple of weeks have been persistently weak, however, the Fed is blaming bad weather conditions and only, while also hinting the guidance can be revised soon. During the second part of Yellen's testimony to the Senate Banking Committee, the Chairman said the central bank will be keeping an eye on the economy to ensure weather was the culprit. At the same time, she pointed out it will take time to decide whether to put monetary policy plans on cruise control, or the pace of the tapering will be revised.
At the same time, jobless claims soared to a one-month high, while durable goods surprised markets to the upside, suggesting the economic data should be treated carefully and cannot be interpreted uniquely. Orders for a long-lasting goods decreased 1% in January following a 5.3% slump a month earlier. Analysts, however, expected a 1.7% drop. Core durables also came above market's estimates, hitting 1.1%. A proxy of future business spending, capital goods orders other than airplanes, advanced 1.7%, almost erasing a 1.8% decline a month earlier. The labour market, however, continue to disappoint, with the number of initial jobless claims rising to 348,000 last week, while the less-volatile four-week moving average remained unchanged at 338,250. Cold weather and winter storms can be a reason for weak data during recent months, however, they can also be an alarming sign of a slowing economy.
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