Reports Not Likely to Discourage Fed Rate Hike

Statistics due out this week on trade and employment will give the Federal Reserve little reason to stray from its path of raising interest rates even with scant evidence of accelerating inflation in the U.S. The Federal Open Market Committee is expected to raise the overnight bank lending rate at least another quarter point when it meets Tuesday, and by all indications will act again in the months ahead, analysts said. The Commerce Department’s trade report due out Tuesday is very likely to show the impact of strong domestic demand on imports. The deficit probably widened to $26.4 billion in January, just shy of an all-time high, analysts said.

Meanwhile, the Commerce Department is expected Friday to report that factory orders for big-ticket goods--ranging from aircraft to home appliances--declined by 0.2% in February after falling 1.3% during January. The manufacturing report will probably reflect weaker aircraft orders.