10 Things You Need to Know: February 25, 2025
Key data releases this week include: FHFA House Price Index (Tue), consumer confidence (Tue), new home sales (Wed), Q4 GDP revision (Thu), durable goods orders (Thu), pending home sales (Thu), personal income and spending (Fri), and PCE Price Index (Fri).
Morningstar
February 20, 2025
The Leading Economic Index published by The Conference Board dropped 0.3% in January, following an upwardly revised 0.1% increase in December, reversing most of the gains of the last two months. Economists polled by The Wall Street Journal expected a 0.2% downtick.
Haver
February 21, 2025
Existing home sales dropped 4.9% m/m (+2.0% y/y) to 4.08 million units (SAAR) in January after increasing 2.9% to 4.29 million in December. The Action Economics Forecast Survey expected January sales of 4.13 million units. The median price of all existing homes slid 1.7% (+4.8% y/y) to $396,900 in January.
Capital Economics
February 21, 2025
February’s Flash Composite PMI provides more evidence that, after expanding by only 0.1% in Q4, the euro-zone economy remains all but stagnant in Q1. Meanwhile, January’s inflation data show that domestic price pressures are strong but easing. We remain convinced that they will decline much further this year.
Bloomberg
February 22, 2025
The Trump administration has reportedly urged Mexico to impose tariffs on Chinese imports to avoid US tariffs. Commerce Secretary Howard Lutnick and other officials discussed this with Mexican Economy Minister Marcelo Ebrard in Washington. Mexican President Claudia Sheinbaum has increased efforts to curb cheap Chinese imports, but Mexico made no commitments during the meeting, agreeing instead to form a working group to explore trade issues.
Capital Economics
February 20, 2025
EM GDP growth picked up in the second half of 2024 but faces headwinds this year from tight policy at home and challenges abroad. Our growth forecasts generally sit below the consensus. Monetary easing will continue but, outside Asia, high inflation means that interest rate cuts will be smaller than most expect. EMs do at least generally look well placed to weather an environment of a stronger dollar and higher US Treasury yields
Barron’s
February 24, 2025
According to economic historian Niall Ferguson, spending more on interest on their debt than on the military has meant the demise of great powers through the ages, most recently Great Britain. In the U.S., military expenditures of $1.107 trillion in 2024 were eclipsed by interest expense of $1.124 trillion. The interest tab is certain to rise as old securities issued in the zero-interest-rate era now ended come due and are replaced with new ones yielding in the 4% range.
Barron’s
February 24, 2025
The U.S. now represents nearly 70% of the world’s equity-market valuation, and more than 70% of the net investment flows into the $13 trillion global market for private investments, including equities and credit. The S&P 500 currently trades for 24.9 times this year’s expected earnings, compared with a historic price/earnings multiple of 16.
Reuters, The Wall Street Journal
February 19, 2025
Federal Reserve officials expressed concern about the impact of President Donald Trump’s tariffs on inflation, according to minutes from the January meeting. The Federal Open Market Committee decided to hold interest rates steady after three rate cuts in 2024, citing a need to see more progress on inflation before making further adjustments.
Capital Economics
February 18, 2025
The economy continues to do well with GDP growing strongly and employment growth solid. We are concerned, however, that the Trump administration’s policies will weigh on GDP growth over the course of this year. Nonetheless, we expect the Fed to remain on the sidelines for at least the next 12 months, leaving the fed funds target range at between 4.25% and 4.50%.