10 Things You Need to Know: February 27, 2024
Key data releases this week include: new home sales (Mon), durable goods orders (Tue), FHFA House Prices Index (Tue), consumer confidence (Tue), Q4 GDP revision (Wed), personal income and spending (Thu), PCE Deflator (Thu), pending home sales (Thu), consumer sentiment (Fri), and ISM Manufacturing (Fri).
Haver
February 20, 2024
The U.S. Leading Economic Index fell 0.4% in January (-7.0% y/y) after a 0.2% December decline. A 0.3% fall had been expected in the Action Economics Forecast Survey. January’s index level of 102.7 was the lowest since May 2020. Five of the ten components made negative contributions to the leading index in January.
Haver
February 22, 2024
Sales of existing homes increased 3.1% (-1.7% y/y) during January to 4.0 million (SAAR) from 3.88 million in December. Earlier figures were revised. The Action Economics Forecast Survey expected January sales of 3.98 million units.
FT
February 21, 2024
The German government cut its GDP predictions to 0.2% this year, down from 1.3% previously predicted. “The situation is extremely challenging,” said economy minister Robert Habeck, who added Germany was struggling with a decrease in global trade, inflation, and high interest rates. The current coalition remains split on what reforms should be implemented to boost the economy.
Oxford Economics
February 20, 2024
By cutting only one of the two main policy rates, Chinese authorities were signaling their determination to use a targeted approach to supporting the economy. The size of Tuesday’s move also reveals — in our view — a genuine concern among Beijing policymakers that the ‘incremental’ slow-drip of policy easing implemented thus far has had little impact.
Financial Times
February 21, 2024
China is importing goods to the US through Mexico in order to avoid hefty sanctions. The number of containers shipped from China to Mexico was 881,000 for the first three quarters of 2023, up from 689,000 for the same time in 2022.
Barron’s
February 26, 2024
Various Fed speakers recently suggested no need to move quickly to lower the central bank’s federal funds target from the current range of 5.25% to 5.50%. That followed the stronger-than-expected recent readings on the labor market and consumer and producer prices. Meanwhile, markets have moved to pricing in Fed cuts totaling 0.80 percentage point by the end of 2024, down from 1.80 point of reductions seen back in December.
Barron’s
February 26, 2024
What if the economy—already defying economic theory by surviving in the face of sharply higher rates—is actually getting stronger? That’s admittedly an odd thing to posit after two years of interest rate hikes. But as crazy as it sounds, evidence is starting to pile up for the acceleration hypothesis.
Bloomberg
February 23, 2024
Goldman Sachs economists have pushed back their view on when the Federal Reserve will begin cutting interest rates to June after parsing recent comments from the central bank and minutes of its January meeting. The US investment bank has dropped its forecast for a May cut and now expects four reductions this year, versus five previously, with moves in June, July, September, and December. It still sees a terminal rate of 3.25%-3.5%.
The Hill
February 26, 2024
Senate Majority Leader Chuck Schumer has warned of the looming risk of a US government shutdown, citing delays in crafting a spending package. President Biden plans to convene congressional leaders Tuesday in an urgent bid to avert a shutdown and secure emergency aid for allies including Ukraine. Although the immediate focus is on preventing the closure of key federal agencies, unresolved issues including border security and foreign aid threaten to prolong the deadlock.