This week will be jam-packed with economic indicators. More important will be how government regulators deal with the SVB debacle so that it doesn't turn into an economy-wide disintermediation disaster in the event that uninsured deposits are withdrawn and parked in Treasuries instead. Our bet is that the Fed and the FDIC will act quickly to keep this from happening. For the sake of financial stability, the Fed may announce a pause in its rate hiking no matter how strong this week's indicators might be.
The BIG number this week will be February's CPI (Tue). Financial markets have been worrying about a hotter-than-expected report because used car prices rose last month. The price of gasoline stopped falling. Cattle prices continued to soar. Like January, February's weather was mild. Nevertheless, we expect that the CPI and February's PPI (Wed) should confirm that inflation is still on a moderating trend based on y/y comparisons (chart). February's consumer inflationary expectations report (Mon) should do the same.
