Coming Week: Ready, Set, Listen

Strip the financial markets down to their bare essentials, and the most important factor determining performance is the cost of capital. In the coming week, the world's arbiters of the price of money will take center stage in a variety of venues.

Federal Reserve Chairman Ben Bernanke, the drum major of this week's parade of policymakers, gives his semiannual Congressional testimony on Wednesday and Thursday. Following this past Friday's trifecta of Fedspeak -- featuring hawkish comments from St. Louis Fed President William Poole, Dallas Fed President Richard "Eighth Inning" Fisher and Cleveland Fed President Sandra Pianalto -- it's highly unlikely Bernanke will be bringing the financial markets roses and chocolates on Valentine's Day.

"In the upcoming testimony, Bernanke can be expected to provide an upbeat assessment of economic conditions," writes Mickey Levy, chief economist at Bank of America. The Fed chairman will focus on "contained" business inventories and "healthy aggregate demand" outside of residential housing, which itself is "adjusting efficiently" and working down "undesired inventories," Levy predicts.

Regarding inflation, "Bernanke will express the Fed's concerns,"despite a recent "favorable drift down" in core readings, Levy continues. "Primarily, core inflation remains above the Fed's long-run objective; the economy is operating close to productivity capacity and there are selective signs of labor market tightness, which is pushing up wages."