1. Warning sounded on inflation danger
The economy has been drifting so near recession that the subject of inflation seems to be off the radar. But economist Eugenio Aleman expects it to be back in everyone’s sights, and quickly. On Wednesday, a report on labor productivity and costs will show wages and benefits rising sharply, at a 4.8 percent rate, according to Aleman, of Wells Fargo & Co. “Inflation is the biggest risk facing the economy today, not recession,” he is telling clients. He believes the Federal Reserve soon will need to reverse course, raising interest rates, in a “sudden about-face for policy.”
2. Additional cuts to Fed rate foreseen
After the Fed dramatically cut its short-term lending barometer by 1.25 percentage points in the course of nine days, critics say the central bank needs to stay on hold. But economist Brian Bethune of Global Insight, Lexington, Mass., says policymakers will notch rates lower on March 18 and April 30, bringing the target rate to 2.5 percent.
3. ICC to rule on fee for gas deliveries
With consumers fretting about the high cost of home heating, the Illinois Commerce Commission will issue a final decision by Wednesday on whether Peoples Gas and North Shore Gas can charge for the delivery of gas that customers don’t ultimately use. The Illinois attorney general’s office has argued that residential and small-business users could pay hundreds of millions of dollars in additional charges.
4. Wheat prices hit record $14 a bushel
Those not worried about inflation might want to avoid strolling the bread and cereal aisles at the supermarket. Wheat prices touched a record last week in Minneapolis, topping $14 a bushel. Manufacturers are facing shortages of hard-red spring varieties, vital for the staff of life and many brands of cereal.
5. Quarterly earnings ‘weakest’ in years
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It’s nearly the end of the trail for fourth-quarter profit reports, and results stack up as “the weakest since the end of the last recession,” said Dirk Van Dijk of Zacks Investment Research. Financial stocks have resulted in two-thirds of recent earnings disappointments, said Van Dijk, who added that “tech is having a remarkably strong quarter.”