February is almost over!  Yet we still have real GDP for the 4th Quarter to come today (Feb. 28) - Calendar!
The consensus estimate for real GDP is 0.7% growth (not negative), GDP deflator - 2.6% (price growth).

We shall SEE!

The new home sales for January came in today -  from the AP news wire:

"...the slowest pace in nearly 13 years. The median price of a new home dropped to the lowest level in more than three years. 

The Commerce Department reported Wednesday that new home sales fell by 2.8 percent last month to a seasonally adjusted annual rate of 588,000 units, the slowest pace since February 1995.

The median price of a new home dropped to $216,000 in January, down 4.3 percent from the December median sales price, the point where half the homes sold for more and half for less. That was the lowest median price since September 2004 and underscored that the steep slide in housing is still under way."

Ben is doing the Humphrey-Hawkins thingy (for my students - testimony required by law to the banking committees of the two houses of Congress):  Wall Street Journal report (subscription required) and New York Times report.

Note that this is actually only the first day of his testimony.  The second day usually does not vary too much from the first.  However, the Senate Banking Committee does sometimes ask different questions, so we shall see!

The requirement is that Ben Bernanke (The Federal Reserve Chairperson of the Board of Governors of the Fed) must tell Congress his goals for Monetary Policy and how the Fed's goals are consistent with those of the President.  Then the legislators get to ask questions!


Courtesy New York Times

At least two big money quotes, in my humble opinion ...

From the Wall Street Journal report:

"The Federal Open Market Committee has already cut the fed-funds rate at which banks lend to each other by 2.25 percentage points since September to 3%, including 1.25 percentage points over an eight-day period last month.

In Wednesday's report, the Fed noted that investors expect 100 basis points in additional rate cuts this year."

    WOW - will investors get that?  - 2% Fed Funds rate will be amazing again!

From the New York Times:

"Mr. Bernanke’s assumption is that slowing economic growth will reduce inflationary pressures in the months ahead, because debt-laden consumers will be far more wary of spending money and businesses will be more cautious about investing in more plant and equipment.

But the success or failure of the Fed’s strategy could depend on something outside Mr. Bernanke’s immediate control: foreign confidence in the American dollar and foreign willingness to keep financing the United States’ huge external debt."

The New York Times article goes on with great insight but this post is already too long!  See the articles for further analysis and info.