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Market Reflections  

February 16, 2018
The day's economic news is led by acceleration in housing starts and strength in permits and also a sizable jump for consumer sentiment where inflation expectations, however, remain flat.

Concern over inflation, and with it the risk of Fed rate hikes, couldn't hold the stock market back not even after Wednesday's very strong consumer price report. The Dow posted a fractional gain on Friday for a 4.3 percent increase on the week and a 2.0 percent gain year-to- date.

In contrast, demand for the 2-year Treasury note was especially weak in what does, unlike the stock market's gain, point to expectations for more hawkish Fed policy. The 2-year yield jumped 12 basis points in the week to 2.19 percent. The dollar index extended its decline, down 1.4 percent on the week for a 3.4 percent loss on the year.