What You Should Know About the Latest Fed Action
A year ago today, the federal funds rate was close to zero, CPI reached 7.9%, and the 10-year Treasury yielded 1.79%. What a difference a year makes.
Job Market Remains Resilient Despite Higher Rates
The economy added 263,000 jobs in November, a decrease from October but a large upside surprise highlighting the continued resilience of labor markets.
A Bit More Pessimistic, A Lot More Realistic
The Federal Open Market Committee increased the target rate by 75 basis points to a 3.25% upper bound and delivered a more pessimistic outlook in their published summary.
Inflation is Easing But Not Enough
Inflation remains the primary concern and for now, the Fed is willing to sacrifice economic growth to get inflation back closer to 2%.
Top Ten Housing Districts
Existing home sales in July fell over 20% from a year ago to an annualized rate of 4.81 million. Outside of the onset of the pandemic, the July sales rate was the lowest since late 2015 when the real estate market was recovering from the Great Financial Crisis.
4 Important Takeaways from the Fed’s 0.75% Hike
The Federal Reserve concluded its two day policy meeting yesterday and announced it was raising its benchmark rate by 0.75%. Here are four observations about yesterday’s rate hike.
Savings Rate Falls As Inflation Takes A Bite
The latest personal income and spending data from the Bureau of Economic Analysis show that part of the driver of spending growth in April was from savings.
Do Investors Think The Fed’s Hammer Works Like A Screwdriver?
The Fed is equipped with blunt instruments – like a hammer – to address their dual mandates of price stability and full employment through various means. The Fed does not have a precision tool – like a screwdriver – to control supply chains.
When it Comes to Earnings, Buy American
U.S. stocks are trading at more expensive valuations than their international counterparts, as they have been for quite some time. However, the chart below illustrates the continued earnings superiority of the U.S. equity market.
Moderating Inflation Should Provide Boost in Consumer Confidence
A slight moderation in inflation will likely provide some needed boost in consumer confidence but we may have to wait another month. The April inflation report was not as soft as many hoped.