by Calculated Risk on 4/28/2013 08:54:00 PM

First a couple of articles ...

From Jon Hilsenrath at the WSJ: Tame Inflation to Keep Fed on Course

With inflation now lower than the Fed wants, officials are likely to conclude their policies show no sign of overheating the economy. That allows them to maintain their $85 billion-a-month bond-buying program ...

Several Fed officials have changed the way they are talking about inflation. In a late March speech, New York Fed President William Dudley described inflation as "below" the Fed target. In mid-April, after new inflation data emerged, he described it as "well below" target, the kind of subtle change central-bank officials often deploy after careful deliberation.

"If inflation is lower and continues to go lower than our target, that would be another reason potentially for not pulling back on our program," said Eric Rosengren, president of the Boston Fed, in an interview this month. [James Bullard, president of the Federal Reserve Bank of St. Louis] said he would consider supporting an increase in bond purchases if inflation fell much further.

Too little inflation is a growing concern at the Fed.

And from Ben Casselman at the WSJ: Demographics Behind Smaller Workforce. I've discussed the participation rate a number of times - see: Labor Force Participation Rate Update, Understanding the Decline in the Participation Rate and Update: Further Discussion on Labor Force Participation Rate - the key point is that most of the recent decline in the participation rate was expected because of demographics.

Monday economic releases:
• At 8:30 AM ET, The BEA will release the Personal Income and Outlays report for March. The consensus is for a 0.4% increase in personal income in March, and for 0.1% increase in personal spending. And for the Core PCE price index to increase 0.1%.

• At 10:00 AM, the NAR will release their Pending Home Sales Index for March. The consensus is for a 0.7% increase in this index.

• At 10:30 AM, the Dallas Fed Manufacturing Survey for April will be released. The consensus is a decrease to 5.0 from 7.4 in March (above zero is expansion).

Weekend:
• Summary for Week ending April 26th
• Schedule for Week of April 28th

From CNBC: Pre-Market Data and Bloomberg futures: the S&P futures are down 6 and Dow futures are down 19 (fair value).

Oil prices were up over the last week with WTI futures at $92.56 per barrel and Brent at $102.70 per barrel.

According to Gasbuddy.com, gasoline prices are down about 25 cents over the last 2 months to $3.48 per gallon. Using the calculator from Professor Hamilton, and the current price of Brent crude oil, the national average should be around $3.41 per gallon. That is about 7 cents below the current level according to Gasbuddy.com, so I expect gasoline prices to fall some more.