10 Things You Need To Know: October 22, 2024
Key data releases this week include: leading economic indicators (Mon), existing home sales (Wed), Beige Book (Wed), new home sales (Thu), durable goods orders (Fri), and consumer sentiment (Fri).
Haver
October 21, 2024
The Conference Board’s Leading Economic Index fell 0.5% (-4.8% y/y) during September following a 0.3% decline during August. A 0.3% decline in the September index had been expected in the Action Economics Forecast Survey. The index has been declining since December 2021.
Haver
October 17, 2024
Total retail sales increased 0.4% (1.7% y/y) during September after an unrevised 0.1% August increase. A 0.3% rise had been expected in the Action Economics Forecast Survey. Sales in the retail control group, which excludes autos, building materials, gasoline stations, and food services, rose 0.7% (4.0% y/y) in September, the fifth straight rise.
Reuters
October 17, 2024
The European Central Bank cut interest rates for the third time this year, lowering its benchmark rate by a quarter-point to 3.25%. ECB President Christine Lagarde emphasized that while inflation is under control, economic challenges persist, and further rate cuts may occur unless economic conditions improve. Traders are increasing expectations of a half-point rate cut in December.
Financial Times, Wall Street Journal, South China Morning Post
October 21, 2024, October 18, 2024, October 21, 2024
The People’s Bank of China has reduced its one-year loan prime rate to 3.1% from 3.35%, its largest reduction on record, and its five-year LPR to 3.6% from 3.85%. The cuts are part of broader efforts to boost growth and address challenges such as a property market slowdown and weak consumer demand.
Capital Economics
October 18, 2024
The latest activity data have brought further evidence that India’s economy has entered a softer patch. Coupled with the RBI’s change in policy stance, this suggests that monetary policy easing is still likely before the end of the year, despite headline CPI inflation coming in hotter-than-expected in September.
Barron’s
October 21, 2024
Since March 2022, the Fed has been shrinking its balance sheet, which was down to $7 trillion this past week. Officials slowed the process in June. The Fed is currently allowing up to $25 billion in Treasuries and up to $35 billion in mortgage-backed securities to mature monthly without reinvesting the proceeds.
Reuters, FX Street
October 16, 2024, October 15, 2024
Mary Daly, president of the Federal Reserve Bank of San Francisco, indicated that the central bank is likely to proceed with one or two more rate cuts this year if economic data aligns with expectations. Meanwhile, Atlanta Federal Reserve President Raphael Bostic has projected a single 25-basis-point interest-rate cut for the remainder of the year, contrasting with the broader expectation of a 50-basis-point reduction, but said he was “keeping [his] options open.”
Capital Economics
October 17, 2024
We expect the Fed to revert to 25bp cuts from here. We have penciled in 25bp cuts at each meeting until the fed funds target range reaches 3.00% to 3.25% in mid-2025, although the tightly contested election next month means there is considerable uncertainty about the outlook.
Bloomberg
October 21, 2024
Many investors think they’re under-allocated to private credit and are looking for more ways to take a slice of the $1.7 trillion market, according to a private markets survey from Goldman Sachs Group Inc. Investors surveyed included asset managers, private pension firms, insurers, endowments and public pensions, known in the industry as limited partners.