US/Washington/POLITICS $SPY

         Fed's Kohn comments echo tone from recent minutes – eco still weak although slowly recovery; eco operating well below potential; inflation isn't going to be a problem; rates to remain low for extended period.  "I last spoke on the economic outlook in October, and my views since then remain largely unchanged".  Kohn notes that home sales have stalled recently.  Says while signs of recovery are emerging in jobs, "the labor market remains extremely weak".  Says core inflation rates have shown a substantial deceleration.  That said, he isn't calling for deflation – "I anticipate that inflation will remain low for a while, with core PCE inflation not likely to fall much further from the subdued pace I cited a few minutes ago".  Kohn repeats "extended period" - the Federal Open Market Committee has stated that the current exceptionally low level of interest rates is likely to be required for "an extended period" to make progress toward our legislative goals of maximum employment and stable prices.  However, he also says the Fed can't leave policy at current levels forever – "we will also want to be sure that we haven't left highly accommodative policy in place so long that economic and financial conditions become conducive to future inflation. Given the lags in the effects of monetary policy, that means we will not be able to wait until the unemployment rate is down close to its long-term level" link 

         Fed's Bernanke comments – not a ton of discussion on the current eco outlook or the state of policy.   

         California's revenue exceeded forecasts in March by $356 million, or 5.9 percent, marking the fourth straight month that collections exceeded forecasts – Bloomberg

         Los Angeles faces threat of insolvency – political gridlock adding to the crisis; a dispute between the city's elected leaders and its powerful municipal utility threat to bring it to the brink of insolvency (WSJ) 

         Muni mark – Bloomberg article says the next big crisis is unfolding in the muni market – Bloomberg 

         Washington nuclear summit being held next week - Israeli Prime Minister Benjamin Netanyahu has cancelled a scheduled appearance at the summit; He made the decision after learning Egypt and Turkey intended to raise the issue of Israel's assumed atomic arsenal at the meeting (Reuters)