Week Ahead: Yellen To Testify Before Congress

The highlight of next week’s economic calendar will almost certainly be Janet Yellen’s testimony before Congress, her first as the newly-installed head of the Federal Reserve.

Fourth-quarter earnings are winding down as well, and there’s a smattering of economic data due including reports on small-business optimism, consumer sentiment and retail sales.

Yellen will appear Tuesday morning in her first semi-annual monetary policy testimony before the House Financial Services Committee.

Given Friday’s tepid jobs report, the second in a row, Yellen will undoubtedly be asked about the Fed’s plans to continue gradually scaling back its long-running stimulus policies. The Labor Department reported the U.S. economy had added just 113,000 jobs in January, a little better than the 75,000 jobs added in December, but not much.

Despite the lousy December labor report, other mixed economic data and turmoil in emerging markets, the Fed voted last month to cut another $10 billion from its monthly bond purchase program known as quantitative easing.

The Fed has pointed to an array of indicators beyond the labor market – GDP and low inflation levels, for instance – to justify its optimism for continued economic growth. But the members of the Financial Services Committee are going to want lots of details.

The National Federation of Independent Business (NFIB), which represents about three-quarters of the small businesses in the U.S., releases its NFIB Small Business Optimism Index on Tuesday. The index is a key measure of whether small businesses, which create 70% of American jobs, feel optimistic enough to hire.

A report on retail sales is out Thursday and reports on import and export prices and consumer sentiment are out Friday.

Fourth-quarter earnings are winding down, but these bellwether companies are scheduled to report next week: Sprint (NYSE:S) on Tuesday; Deere & Co. (NYSE:DE), MetLife (NYSE:MET), Owens Corning (NYSE:OC), CBS Corp (NYSE:CBS), and Cisco Systems (NADAQ:CSCO) Wednesday;  and PepsiCo. (NYSE:PEP) on Thursday.