There was little clarity from the latest New York Fed survey on Monday. The poll showed the public sees inflation a year from now at 3%, unchanged from the prior month, but they raised their three-year view to 2.9% while cutting the five year outlook to as low as 2.6%.
However, the survey also showed creeping nervousness about job security and debt repayments.
And this was something dovish Chicago Fed chief Austan Goolsbee chimed with on Monday too, saying the U.S. central bank must weigh how much longer it can maintain its current interest rate stance without it damaging the economy.
“You’ve got to pay attention to how long do you want to be that restrictive,” Goolsbee said. “If you’re there too long, the unemployment rate is going to start going up.”
The upshot for stocks was a flat Monday and futures have shifted little overnight.
U.S. Treasury yields got some respite ahead of a series of big auctions this week, starting with $58 billion of 3-year notes later on Tuesday. U.S. 10-year yields slipped back from 2024 highs, ebbing below 4.40%, and the dollar came off the boil too.
Despite worries about U.S. public debt load, Morningstar DBRS confirmed its AAA credit rating of the U.S. Treasury on Monday.
The other focus of the week is the start of the corporate earnings season on Friday.
Annual S&P500 profit growth through the first quarter is penciled in at 5%, with revenue growth of some 3% – cooler than 7% and 4% forecasts respectively seen at the start of the year.
However, earnings growth is still expected to accelerate back to as high as 14% by the final quarter of the year.
And while the expected annual earnings expansion for the full calendar 2024 has slipped about two points to just under 10%, the 2025 outlook has been revised up by a similar amount to near 14%.