Investors will have eyes, ears on Yellen

Federal Reserve Chair Janet Yellen will speak Friday about the central bank’s long- term policy framework. Before then, reports on home sales, orders of longlasting goods and the U. S. trade balance will hold the spotlight in this week’s economic news.

Yellen will deliver the keynote speech, titled “Designing Resilient Monetary Policy Frameworks for the Future,” at the Kansas City Fed’s two- day Monetary Policy Symposium at Jackson Hole, Wyo., on Friday. Investors will tune in closely to gauge the likelihood of an interest rate hike as the Fed has yet to raise short- term rates this year. The July meeting minutes show, however, that a rate increase “was or would soon be warranted.”

An update on new- home sales will lead the way Tuesday, with existing- home sales following on

Wednesday to complete a snapshot of the housing sector in July. High demand has heated up sales and transaction prices in recent months, while a shortage of labor and land has slowed supply from catching up.

Nomura Global Economics expects a decline in both annualized rates, according to a research report.

News of durable goods will be revealed on Thursday, pointing to how busy factories will be in coming months. Previously, June’s orders of long- lasting equipment posted the largest slip in two years, as military aircraft orders tumbled 30%.

However, a proxy for business investment — excluding the volatile aircraft and defense orders — actually edged up. Stronger recent data on industrial production of most durable goods and new orders in the manufacturing sector suggest goods orders might have rebounded in July.

Friday, the Census Bureau is releasing an advance report on the U. S. trade balance. Exports of industrial supplies and cars slowed in June, but that was offset by an increase in shipments of food and beverages and consumer goods.

Nomura expects a narrower deficit in July as data on shipping containers and trade prices suggest higher exports and lower imports.

AP Janet Yellen