U.S. Review
Monetary Policy: Continuity—For Now
· In her testimony to the Congress, the new Fed Chair called for continuity and suggested that the unemployment rate alone could not provide an adequate picture of the labor market.
· Inclement weather continues to restrain the economy, with weaker retail sales and more evidence of adverse employment effects.
· Industrial production unexpectedly dropped in January corroborating the picture painted by last week’s ISM manufacturing figure, which declined markedly.
Global Review
Modest Economic Growth In Most Foreign Economies
· Data released this week showed that the recovery that began in the Eurozone last summer continued at a modest pace in the fourth quarter. In China, international trade data for January suggest that the pace of economic growth in that country remains reasonably solid thus far in Q1 2014.
· Even though the unemployment rate in the United Kingdom is rapidly closing in on 7 percent, the Monetary Policy Committee now vows to keep policy rates unchanged until space capacity in the economy is eliminated. We believe that the MPC will keep rates unchanged until summer 2015.
Read the full report: Economic Research
Wells Fargo