Wall St. to focus on Fed stance on rates

NEW YORK —  After weeks of stock market turbulence caused by soaring bond yields, Wall Street will now be able to gauge the chance of an interest rate hike straight from the source: the Federal Reserve.

The central bank’s Federal Open Market Committee meets Wednesday and Thursday to discuss interest rates. The Fed is widely expected to keep the benchmark rate steady at 5.25%, as it has done since last summer, but the policy statement it releases Thursday will be parsed for clues about future moves.

For months, policymakers have stated that they expect the economy to recover, and that curbing costs is their primary concern in light of uncomfortably high inflation. Any change in that stance could rile the stock market.

Other data that could help investors decide whether inflation is rising at a worrisome pace are in the Commerce Department’s report Friday on personal income and spending, which includes a reading on core personal consumption expenditures.

The year-over-year core expenditure figure, which excludes food and energy, is the Fed’s preferred inflation gauge, and it is expected to have risen to 2.1% in May from 2% in April, according to the median estimate of economists surveyed Friday by Thomson Financial.

Personal income is expected to have risen 0.6% in May, up from a decline of 0.1% in April, and spending is expected to have increased 0.6%, slightly higher than the 0.5% rise in April.

Major indexes fell last week, with the Dow Jones industrials down 2.1%, the Standard & Poor’s 500 index down 2% and the Nasdaq composite index off 1.4%.

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At a glance

Today

National Assn. of Realtors reports on sales of existing homes for May.

Walgreen releases quarterly earnings.

Treasury bill auction.

Tuesday

Conference Board reports its monthly consumer confidence index, and the Commerce Department releases new-home sales for May.

Former Alabama Gov. Don Siegelman and ex-HealthSouth CEO Richard Scrushy will be sentenced in federal court on their bribery convictions.

Oracle, Nike, Lennar and Kroger release quarterly earnings.

Wednesday

Federal Open Market Committee, the policymaking part of the Federal Reserve, begins two-day meeting on interest rates.

Commerce Department reports on durable goods orders for May.

ConAgra Foods, Red Hat and Bed Bath & Beyond release quarterly earnings.

Thursday

Commerce Department reports on gross domestic product.

Labor Department reports on weekly jobless claims.

KB Home, Palm, Research in Motion, Monsanto, Rite Aid, General Mills and Constellation Brands release quarterly earnings.

Friday

Commerce Department reports on personal income and spending for May, as well as construction spending for May.

Source: Times staff and wire reports