Investing.com – With U.S. stock markets closed on Monday for the Washington’s Birthday holiday, futures were registering slight gains, suggesting yet that Wall Street could head for new records when doors reopen on Tuesday.
“A light data docket means that we expect markets to take their cue from U.S. monetary and fiscal policy signals,” economists at ING said in a note released Monday.
In a slow week for economic data that included existing home sales for January, initial jobless claims, January new home sales and a revised reading on Michigan consumer sentiment for February, the focus would likely be on the release of the minutes from the Federal Reserve’s (Fed) most recent policy meeting on Wednesday at 2:00PM ET (19:00GMT).
There are also a few Fed speakers this week, with Minneapolis Fed president Neel Kashkari, Philadelphia Fed chief Patrick Harker and San Francisco Fed president John Williams due to speak Tuesday, Fed governor Jerome Powell set to appear Wednesday, while Atlanta Fed President Dennis Lockhart is scheduled for Thursday.
“Fed comments in the week ahead will echo Yellen’s neutral-hawkish tone, the (minutes) could show more balance sheet shrinking discussions, while a flurry of Fed talk should, on balance, keep a March rate hike on the table,” ING indicated.
Headlines from Washington will also most likely remain in focus in the week ahead, as traders await further details on President Donald Trump's promises of tax reform, deregulation and infrastructure spending.
Markets are currently pricing in only about an 18% chance of a Fed rate hike occurring at their next meeting in March, according to Investing.com’s Fed Rate Monitor Tool.
The odds for the first policy tightening are at about 69% for the June meeting, while the second and final rate hike in 2017 has a chance of about 50% for November and 72% for December.