10 Things You Need to Know September 26, 2023
Key data releases this week include: FHFA House Price Index (Tue), new home sales (Tue), consumer confidence (Tue), durable goods orders (Wed), Q2 GDP revision (Thu), pending home sales (Thu), personal income and spending (Fri), PCE Deflator (Fri), and consumer sentiment (Fri).
Haver
September 19, 2023
Total housing starts declined 11.3% (-14.8% y/y) during August to 1.283 million (SAAR) after rising 2.0% in July to 1.447 million, revised from 1.452 million. Starts were 28.8% below the most recent peak of 1.803 million in April 2022 and stand at the lowest level since June 2020. The Action Economics Forecast Survey expected 1.430 million starts In August.
Haver
September 20, 2023
At Wednesday’s meeting of the Federal Open Market Committee, the target range for the Federal funds rate was left unchanged at 5.25% – 5.50%. The projected Federal funds rate at year-end 2023 was unchanged at 5.6%, but for year-end 2024 it was raised to 5.1% from 4.6%. The rate at year-end 2025 was raised to 3.9% from 3.4%.
Haver
September 21, 2023
The U.S. Leading Economic Index (LEI) fell 0.4% m/m in August after drops of 0.3% in July and 0.6% in June. A 0.5% m/m decline in August had been expected in the Action Economics Forecast Survey. The August LEI at 105.4 was the lowest level since June 2020. The year-on-year rate of change was at -7.6% in August. Six of the LEI’s ten indicators contributed negatively to the change.
Bloomberg
September 22, 2023
Private-sector activity in the euro-area continued to shrink in September, suggesting the economy contracted in the current quarter. The S&P Global PMI showed a fourth consecutive month of falling output, hitting 47.1. While that’s a slight improvement in August, the reading is clearly below the 50 level, that indicates contraction. Economists had predicted a drop to 46.5.
Capital Economics
September 22, 2023
We now expect the Bank of Japan to hike its policy rate – for the first time in sixteen years – next January. While we think global markets are generally braced for such an event, there’s a clear risk nonetheless that it puts pressure on long-term bonds elsewhere – as the loosening of Yield Curve Control seemed to earlier this year.
Barron’s
September25, 2023
The 4.5% yield represents the long-term average for U.S. government debt, and by that we mean really long term, going all the way back to 1790. Meanwhile, Charles Schwab fixed-income strategist Kathy Jones points out that Treasury yields tend to peak before the last rate hike of the cycle. She sees now as a good time to lock in bond yields before they fall.
FT
September 24, 2023
Lawmakers are set for a crucial week as they attempt to avert a government shutdown, starting with a vote in the House to set parameters for debate on four funding bills. Afterward, the effort could shift toward passing a stopgap spending deal, although some lawmakers have already signaled opposition to a continuing resolution, which would maintain funding at current levels.
Bloomberg
September 19, 2023
Global economic growth next year will slow to 2.7%, from an already lackluster 3% this year, as high interest rates and China’s flagging recovery weigh on activity, according to the Organization for Economic Co-operation and Development’s latest forecasts. “While high inflation continues to unwind, the world economy remains in a difficult place. We’re confronting the double challenges of inflation and low growth,” OECD chief economist Clare Lombardelli said.
Bloomberg
September 20, 2023
About 23 million, or 45%, of all Americans ages 18 to 29 are living with family, roughly the same level as the 1940s, a time when women were more likely to remain at home until marriage and men too were lingering on family farms in the aftermath of the Great Depression.