US Economic Weekly:The soft parade:

Macro viewpoint: The soft parade

    We are revising our GDP growth forecast down to 0.9% in 2Q but up to 2.0%in 3Q, and trimming our inflation forecasts this year and next.

    Inflation has been trending lower for the past several quarters. Some attribute thisto temporary or “special” factors, but we disagree: low inflation is here to stay.

    Fed watch: Steady support

    In his two-day Humphrey-Hawkins testimony, Fed Chairman Ben Bernankecontinued the dovish themes he outlined last week. He sounded cautious on theoutlook, noted the data dependency for tapering, and suggested that rate hikesare still a long way off.

    Housing watch: Start, don’t stop

    The housing data have been strong with the notable exception of housing starts.

    We believe the fundamentals are supportive of greater building and look for apickup in the second half of the year. That said, annual average starts will remainbelow one million for the year.

    The week ahead: I would buy you a house

    In a very light data week, focus will be on existing and new home sales data,which we expect to come in strong, and the durable goods report.