TheChek News Flow

Economic Data Summary:

• Weekly MBA Mortgage Applications -3.3% vs consensus of ; Last Week was 7.3%
• November CPI -0.3% vs consensus of -0.1%; October was 0.0%
• November Core CPI 0.1% vs consensus of 0.1%; October was 0.2%
• • The entire decline in prices can be attributed to the energy sector. Energy prices fell 3.8% in November, marking the fifth consecutive monthly decline and the largest drop since falling 9.5% in December 2008. Gasoline prices fell 6.6% after declining 3.0% in October.
    
• Third Quarter Current Account Balance -$100.3 bln vs consensus of -$95.0 bln; Second Quarter was revised to -$98.4 bln from -$98.5 bln

Fed/Treasury Events Summary:

• Fed Keeps 'Considerable Time Language":  Based on its current assessment, the Committee judges that it can be patient in beginning to normalize the stance of monetary policy....the Committee sees this guidance as consistent with its previous statement that it likely will be appropriate to maintain the 0 to 1/4 percent target range for the federal funds rate for a considerable time following the end of its asset purchase program in October, especially if projected inflation continues to run below the Committee's 2 percent longer-run goal, and provided that longer-term inflation expectations remain well anchored. However, if incoming information indicates faster progress toward the Committee's employment and inflation objectives than the Committee now expects, then increases in the target range for the federal funds rate are likely to occur sooner than currently anticipated. Conversely, if progress proves slower than expected, then increases in the target range are likely to occur later than currently anticipated.
  
• 3 Members dissented:
• • Dallas Fed President Fisher, a noted hawk, dissented on the belief that U.S. economic performance since October has moved forward since October, more than the majority of the Committee envisions, the date when it will likely be appropriate to increase the federal funds rate. 
  • Philadelphia Fed President Plosser, another noted hawk, dissented on the grounds that the statement should not stress the importance of the passage of time as a key element of its forward guidance and that it should not emphasize the consistency of the current forward guidance with previous statements given the improvement in economic conditions.
  • Minneapolis Fed President Kocherlakota, a noted dove, thought the Committee's decision created undue downside risk to the credibility of the 2 percent inflation target. 
    
• Fed Chair Janet Yellen Press Conference- Yellen said unlikely to begin normalization process for the next couple of meetings (remains data dependent). If inflation continues to run below the 2% inflation rate goal, it could hold rates lower for a considerable amount of time... with Asset purchase program wound down in October, it seemed less meaningful to reference a rate increase that is based on even in the past; new language focuses on data dependency.
  

Upcoming Economic Data:

• Weekly Initial Claims due out Thursday at 8:30 (Briefing.com consensus of 292K; Last Week was 294K)
• Weekly Continuing Claims due out Thursday at 8:30 (consensus of 2.510 M ; Last Week was 2.514 M )
• December Philadelphia Fed due out Thursday at 10:00 (consensus of 26.0; November was 40.8)
• November Leading Indicators due out Thursday at 10:00 (consensus of 0.5%; October was 0.9%)