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The S&P 500 resided in positive territory for most of today, but declined late in the session in New York. With less than half an hour to the close on Wall Street, the blue chip index was down 0.12% at 1817.6. The Dow Jones slid more, dropping 0.26% to 15,953. These are modest drops though, especially so within the context of the stock market’s recent gains.
President of the St Louis Federal Reserve James Bullard was speaking at the New York Stock Exchange today and hit some optimistic notes, saying he expects economic growth of 3% this year for the US, despite recent softness caused by adverse weather.
Although Mr Bullard is not a voting member of the FOMC this year, I have found his comments to be useful in the past as his centrist views tend to reflect the consensus at the Fed. He said the central bank will have to tweak its forward guidance, discarding its thresholds in favour of ‘more qualitative judgements’ in light of the ‘dramatic’ fall in unemployment in recent months that have unemployment brushing up against the 6.5% threshold while inflation languishes well below target. This would be a return to more conventional monetary policy.
The US Treasury Budget shows a much smaller deficit for January, narrowing to $10.4 billion from the $53.2 billion seen last in the previous month, with receipts up a sharp 8.2% year-on-year, while spending fell 2.8% year-on-year.