This week, it's all about the Fed, as the Federal Reserve Board will decide whether to raise interest rates one more time. Wall Street is betting that the Fed will leave rates steady when it meets on Tuesday, given recent signs that the economy is decelerating. But if Fed Chairman Ben Bernanke pulls a fast one and raises rates one more time in an effort to whip inflation, then the markets could be in for a volatile ride.
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Monday, August 7:
CONSUMER CREDIT: The Federal Reserve Board will release new data on the total amount of consumer debt outstanding. With interest rates rising, economists are particularly concerned about how consumers are handling higher debt-servicing costs.
EARNINGS TO WATCH: El Paso Corp., Priceline.com
Tuesday, August 8:
FED MEETING: The Federal Reserve will debate whether to raise short-term interest rates for the 18th consecutive time since the summer of 2004. If the Fed decides to pause, expect a brief rally in the equity market. But if the Fed raises rates--or pauses but still indicates that it may raise rates again at future meetings--then all bets are off.
PRODUCTIVITY: The Labor Department will release the latest results on worker productivity in the second quarter. The more productive the labor force, the less likely it is that inflation will take hold over the economy.
EARNINGS TO WATCH: Cisco Systems, Clear Channel Communications, Gemstar-TV Guide, and News Corp.
Wednesday, August 9:
EARNINGS TO WATCH: General Electric, Hollywood Media, Liberty Media, Viacom, Walt Disney, and Westwood One
Thursday, August 10:
EARNINGS TO WATCH: EchoStar, Four Seasons Hotels, JCPenney, and Target Corp.
Friday, August 11:
RETAIL SALES: How soft is the economy growing? One way to tell is to check on the health of U.S. consumers. On Friday, the Commerce Department will release its latest data on retail sales.
