Fed Chair Jerome Powell made clear there is no intention of tapering bond purchases saying “now is not the time” for that discussion and the bank has learned lessons from the 2013 taper tantrum.
Grim data on consumption figures with December retail sales down 0.7%, missing expectations of a flat reading, and sales ex-autos dropping 1.4%, significantly below expectations of a 0.2% drop.
In contrast to the retail figures, the manufacturing and industrial recovery continues with December figures for both production readings above consensus. Weather played a bit of a role here in beating expectations, but the further recovery helps put manufacturing output only 2.6% below its February peak.
Pres.-Elect Biden unveiled his economic relief package, which comes in at $1.9 trillion with increased direct assistance, tax credits, state and local aid, and vaccine distribution funds among other programs. Despite Democrat’s Senate victories in Georgia, there will likely be tough negotiations that will pull down that figure since some measures likely will require 60 Senate votes.