10 Things You Need to Know: January 28, 2025
Key data releases this week include: new home sales (Mon), FHFA House Price Index (Tue), durable goods orders (Tue), consumer confidence (Tue), FOMC rate decision (Wed), Q4 GDP (Thu), pending home sales (Thu), Employment Cost Index (Fri), personal income and spending (Fri), and PCE Price Index (Fri).
Haver
January 22, 2025
The Conference Board’s Leading Economic Index fell 0.1% (-3.0% y/y) during December, following a 0.4% November rise. A 0.1% easing in the December index had been expected in the Action Economics Forecast Survey.
Haver
January 24, 2025
Sales of existing homes increased 2.2% (9.3% y/y) to 4.24 million (SAAR) during December after rising an unrevised 4.8% to 4.15 million in November. The Action Economics Forecast Survey expected December sales of 4.17 million units. The median price of all existing homes (NSA) held steady (+6.1% y/y) in December at $404,400.
WSJ, FXStreet, Reuters
January 27, 2025
The European Central Bank is expected to cut interest rates for a fourth consecutive meeting on Thursday, as eurozone economic growth slows. Fourth-quarter GDP is projected to have risen by just 0.1%, with Germany and France showing particular weakness.
Capital Economics
January 24, 2025
We still have little clarity on the timing or size of any tariff increases President Trump is planning to impose on China. For now, we are sticking with our assumption that a 60% tariff will be introduced in the second quarter of the year. Meanwhile, the detailed breakdown of the Q4 GDP figures points to a broad-based pick-up in services growth on the back of a marked turnaround in the property services output.
Reuters
January 27, 2025
Emerging markets are facing potential challenges following Donald Trump’s return to the White House, with concerns about the impact of trade tariffs, a stronger dollar and rising dollar-denominated debt. Countries such as Malaysia, the Czech Republic and Mexico are expected to be the hardest hit, while others such as India and Argentina could be poised to fare better. Investors are also turning to frontier markets in Africa, Eastern Europe and Asia to avoid potential US tariffs.
Barron’s
January 27, 2025
The potential for resurgent inflation due to possible tariffs—and any crackdown on immigration that reduces the workforce and pushes wages higher—could lead Fed Chair Jerome Powell to start sounding more hawkish and spook a market that only recently moved past his heel turn at the December meeting.
Barron’s
January 27, 2025
Renewal of the Tax Cuts and Jobs Act of 2017 would add about another $4 trillion to the debt over the next decade. That is before adding goodies like exempting tips and taxes from overtime pay, as Trump promised. No one knows how much tariffs will offset the shortfall now.
Barron’s
January 27, 2025
According to the Social Security trustees’ latest forecast, the retirement trust fund will run dry in 2033. After that, incoming tax revenue would be sufficient to fund only 79% of scheduled benefits. Put another way, recipients a few years from now would face automatic benefit cuts of 21% if Congress doesn’t act to avert the cuts.
FT
January 26, 2025
The Federal Reserve is expected to hold interest rates at 4.25% to 4.50% at its upcoming meeting this week. Despite President Trump’s calls for rate cuts, the Fed is maintaining its current stance amid economic uncertainties, including potential import taxes and immigration policy changes.