The big economic news today will start the statement from the Federal Open Market Committee at 2 PM ET and followed by Janet Yellen's press conference 30 minutes later. The economic press has been a veritable cacophony pundit views on whether the word "patient" remains or is discarded in the new statement. Here is the key sentence in the previous statement (emphasis added).
Based on its current assessment, the Committee judges that it can be patient in beginning to normalize the stance of monetary policy.
With the focus now on the FED, let's take a quick look at a couple of items in the March Wall Street Journal survey of economists, starting with where the Federal Reserve is headed with the Fed Funds Rate, which is currently hovering around 0.12 percent.
The March survey was sent to 73 economists, with responses received from 63. Here is a table showing the major response statistics -- Low, Median (middle), Average (aka Mean) and High -- at six-month intervals from June 2015 to December 2017.
Here is the equivalent table showing the forecasts for the 10-year Treasury Note yield, which closed yesterday at 2.06 percent.
Since a picture is worth a thousand words, here's a short visual essay illustrating the forecast averages for the two series, rounded to one decimal.
Economic indicators this year have been a mixed bag. The most popular headline employment numbers (new nonfarm jobs and the unemployment rate) have beaten expectations. But Industrial Production had been weak, and Retail Sales have been abysmal. Of course, the weakness can be attributed to another savage winter (a repeat of last year's meme).
Meanwhile, the economists in the WSJ survey have a rather optimistic view of the US economy, which they see strengthening enough to send the Fed Funds Rate to 1.5 percent by the middle of next year and above two percent by the end of 2016. The yield on the 10-year Treasury is expected to rise steadily across the six-month snapshots from the middle of 2015 to the end of 2017. In fact, the most optimistic of the economists see the 10-year yield at five percent by the end of next year.
In contrast to this optimism, some fixed-income specialists see yields heading lower. Jeffrey Gundlach, the founder and chief investment officer of Los Angeles-based DoubleLine Capital. "It's more likely that the 10-year Treasury dips below 2% than it goes up as high as 3% during the course of 2015," he said in a March 10 conference call (more here).
What will the future bring? As I've said before, I'm reminded of the 1956 Academy Award winner for best song: Que Sera, Sera (Whatever Will Be, Will Be), immortalized by Doris Day. Will retail sales surge with the coming of spring? Will the 10-year Note yield be approaching 4 or 5 percent by the end of 2017? Only time will tell.