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Reading the Housing Sector: The Good, the Bad and the Surprising

We think the housing sector should hold steady with good structural trends, a potentially bad environment for housing bargains and a scenario for prolonged inflation.
Election 2020: Expect the Unexpected?

We’ve gone without a lot of things in 2020. Surprises aren’t one of them. After ten months of twists and turns, most of us are ready for a nice long stretch of the mundane. But this has been a strange year, and neither the year nor, I fear, the strangeness is over.
US Consumers Appearing Less Confident

Consumers are traditionally the engine of the US economy, and I believe consumer confidence is an important indicator of consumer intentions. The August reading of the Conference Board’s Consumer Confidence Index suggests that consumers are not feeling optimistic.
The FIMA Repo Facility: The Fed's Solution to the Global US Dollar Crunch
On March 31, the Federal Reserve announced the creation of another new liquidity facility; this one is aimed at central banks and international institutions. This new facility is a temporary repurchase agreement facility for Foreign and International Monetary Authorities (FIMA)...
Fed to the Rescue: Providing Liquidity to the Corporate Bond Market
To help support investment-grade corporate bond market liquidity, the Federal Reserve introduced two facilities March 23: the Primary Market Corporate Credit Facility (PMCCF) and the Secondary Market Corporate Credit Facility (SMCCF).
Inching Toward A Deal: What’s Next in the US-China Trade Negotiations
The US and China surprised me with their announcement of a small, “phase one” trade deal last week. I had thought any kind of deal would be a long shot, so I view this development as good news. Here’s a summary of the deal and what could happen next.
Friday Fact: US-China Trade Data Measures the Damage
The fact that US trade with China has declined shouldn’t be a surprise. But how bad is the damage? According to the US international trade report for July, released September 4, US exports to China have declined at double-digit rates for the past 12 months. This is the longest sustained contraction in the last 20 years.
Maybe Inflation Didn't Ease: A Look at Trimmed-Mean Inflation
"Core" PCE inflation year over year eased from a recent high of 2.04% last July to 1.55% in March. This easing has made some market participants speculate that the US Federal Reserve will ease up on monetary policy. However, there’s more than one way to measure inflation.
US Midterm Elections: The Base Case Scenario and the Implications
The national midterm elections are today. As of yesterday morning, Nate Silver’s FiveThirtyEight website is giving the Democrats an 85.6% chance of taking the House of Representatives and the Republicans an 85.6% chance of keeping the Senate. This forecast should be no surprise; the president’s party almost always loses House seats in the first midterm election...
Friday Fact: Consumers Are Divided on Business Conditions
I noticed an interesting result in the Conference Board’s most recent Index of Consumer Confidence in March. The percentage of survey respondents describing business conditions as "good" reached its highest point since 2000. Great news, right?
Small Businesses and the Employment Mismatch
In early August, the National Federation of Independent Business (NFIB) released a small business survey that revealed an upbeat assessment of the labor market. Firms have lots of job openings and they are planning to hire, but they are having a hard time finding qualified applicants; the quality of labor is a problem.
Fed Watch: All Eyes on Yellen
This week’s Federal Reserve Open Market Committee (FOMC) meeting will be anything but boring. The Federal Reserve seems eager to move toward rate and balance sheet normalization, probably because President Trump is unlikely to nominate Fed Board Chair Janet Yellen for another term when her current term expires in January. I expect Yellen and her colleagues to take three steps this week.