Week Ahead: Federal Reserve policymaking meeting

The biggest economic headline this week will probably come from the Federal Reserve's policymaking meeting, but don't expect a change of direction.

Tuesday

Existing-home sales data for May are projected to show a 6.5 percent gain over April, but strong sales are unlikely to last much longer. Numbers are still being inflated by the federal home buyers' tax credit.

Also Tuesday, the Federal Housing Finance Agency releases its home price index. Analysts expect it to show that prices edged up 0.3 percent in April.

Wednesday

New-home sales are forecast to have fallen 18.7 percent in May, reversing a 14.8 percent gain in April, as the end of the home buyer tax credit started to make a major impact in that segment of the housing market.

The two-day meeting of the Federal Open Market Committee, the body that sets the Fed's monetary policy, ends Wednesday. Fed leaders are all but certain to leave their target for short-term interest rates unchanged near zero, and will very likely continue to indicate, as they did in the statement from the committee's April meeting, that rates will stay "exceptionally low" for an "extended period."

The real news out of the meeting should be in the language of the Fed leaders' statement. Look for them to maintain their view that economic expansion is underway and inflation is well contained, but the statement could also reflect deepening worries about the risks to the U.S. economy from the European debt crisis. Most Fed leaders who have commented on that question so far, however, have indicated that they expect only a modest impact from Europe.

Thursday

Durable-goods orders are forecast to have fallen 1.3 percent in May, driven by declines in the transportation sector, which includes the volatile market for airplanes. Excluding transportation, orders are expected to have risen 1 percent.

Friday

The final revision of first-quarter gross domestic product is expected to be unchanged, affirming the 3 percent annual growth rate previously announced.

-- Neil Irwin