Several weaker-than-expected numbers released Friday, including a small decline in industrial production last month and a very large $40.1 billion trade deficit for November, gave further evidence that the U.S. economy's "soft patch" hasn't begun to harden. The figures sparked a rally in the bond market, with some Treasury yields falling 5 to 7 basis points that day. Meanwhile, investors and analysts are waiting to see not so much what Federal Reserve policymakers do with interest rates when they meet next week -- virtually no one expects another rate cut -- but what they have to say about the state of the economy. Recently several officials have said that expect faster growth as the year wears on, though the impact of a war with Iraq remains a major uncertainty.
This week's Treasury auctions will be delayed because of the Martin Luther King Jr. holiday. On Tuesday, the Treasury will sell $17 billion in three-month bills and $15 billion in six-month bills, which yielded 1.17 percent and 1.21 percent, respectively, in when-issued trading Friday. Also on Tuesday, the Treasury will announce details of an auction of four-week bills to be held Wednesday.
-- John M. Berry