Economic News Thread | Fed Quarter Point rate cut

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Enigma94 said:
While this is true in a general sense, it's really housing that's causing the inflation above the Fed's target. The goods component of core CPI has actually seen a decrease every month in 2024 and housing has contributed fully two-thirds of the increase in inflation. So while inflation is still elevated above the Fed's target, we have and continue to see a drop in the prices of goods. It's also true that housing is a lagging indicator and current rents have stalled, so in my estimation the war against inflation has pretty much been won.

www.minneapolisfed.org

Despite cooling prices for new leases, overall housing inflation could remain elevated into 2025 | Federal Reserve Bank of Minneapolis

We find a long lag between new leases and the overall cost of shelter in the consumer price index
www.minneapolisfed.org www.minneapolisfed.org
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Once interest rates fall, housing should loosen up some with new housing starts. It it takes a 6-12 months to build. But At least existing homes will come onto the market lowering housing prices.
 
lawtig02 said:
I agree with you. I’m extremely happy with how the economy has been managed. My point was just that we don’t actually want deflation, so a positive IR is actually a good thing. It’s even better when people are getting some relief at the grocery store and the gas pump, but we shouldn’t discount housing pain (and I know you’re not doing that). Especially for young people, a strong position by Kamala on rents and housing inventory could go a long way.
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Sorry to reply to my own post, but this is very encouraging.

 
nycfan said:
I think people just perceiving the economy through a different lens (a possible new, future-forward leader) might help improve overall view of the economy and as a result of the Harris/Walz ticket.

I think people felt bad because they felt they had this guy as POTUS:

wormtongue-2.jpg

Free of that depression glaucoma filter, many folks may start to see the economy through new eyes.
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Great LOTR reference.

Let’s hope that we kick the MAGATs ass as the Rohirrim and Aragorn and Imrahil kicked the Witch-king of Angmar’s ass on the Pelennor Fields before Minas Tirith.
 
Have to say as a real estate appraiser for the last 43 years I've seen 21% & 2.1% rates. Real estate seems to still move but the recent local run up in values was close to 35% over a 3-4 year period. So currently days on market expansion and price reduction appears to be a positive sign for buying but the price points aren't going down. If you're in the local RTP market you need to check out Stacey Affindsen's

TARR - Triangle Area Residential Realty - Welcome to TARR Reports

tarreport.com tarreport.com
 

U.S. leading indicators index falls in July, but is not signaling recession​

Index drops negative 0.6% versus forecast of [negative] 0.4%​

"... The leading index is a gauge designed to show turning points in the economy, but has not worked well in the post-pandemic environment.

The index had fallen for two straight years before briefly turning positive in February.

Key details: A measure of coincident economic conditions was flat in July after increasing 0.2% in June.

A measure of lagging indicators inched down by 0.1% in July after a 0.2% gain in June.

Big picture: The economy has been slowing, raising concern again about a recession.

Traders in derivatives markets seem to think the economy will need rapid Federal Reserve rate cuts to avoid a serious downturn.

Many economists think fears of a recession are overblown. On Monday, Goldman Sachs has lowered the chances the U.S. would enter a recession.

What the Conference Board said: “The LEI continues to fall on a month-over-month basis, but the six-month annual growth rate no longer signals recession ahead,” said Justyna Zabinska-La Monica, senior manager for the business-cycle indicator at The Conference Board. ..."
 

Exclusive: Fed's Kashkari Says Weaker Job Market Should Open Door to September Cut​


"Minneapolis Fed President Neel Kashkari signaled he would be open to lowering interest rates at the central bank’s next meeting because of a rising possibility that the labor market weakens too much.

“The balance of risks has shifted, so the debate about potentially cutting rates in September is an appropriate one to have,” Kashkari said in an interview.

In June, Kashkari had said he thought a rate cut might not be warranted until the end of the year. But the rise in the unemployment rate, to 4.3% in July from 3.7% at the start of the year, points to greater risks of an undesirable slowdown.

“If we were not seeing evidence that the labor market was weakening, if the unemployment rate was still in the 3.7% to 3.8% range, I don’t think I would be even debating, ‘Hey, is now the time to cut rates?’” said Kashkari.

Instead, he said, the conversation has shifted because “inflation is making progress and the labor market is showing some concerning signs.” ..."
 
nycfan said:

Exclusive: Fed's Kashkari Says Weaker Job Market Should Open Door to September Cut​


"Minneapolis Fed President Neel Kashkari signaled he would be open to lowering interest rates at the central bank’s next meeting because of a rising possibility that the labor market weakens too much.

“The balance of risks has shifted, so the debate about potentially cutting rates in September is an appropriate one to have,” Kashkari said in an interview.

In June, Kashkari had said he thought a rate cut might not be warranted until the end of the year. But the rise in the unemployment rate, to 4.3% in July from 3.7% at the start of the year, points to greater risks of an undesirable slowdown.

“If we were not seeing evidence that the labor market was weakening, if the unemployment rate was still in the 3.7% to 3.8% range, I don’t think I would be even debating, ‘Hey, is now the time to cut rates?’” said Kashkari.

Instead, he said, the conversation has shifted because “inflation is making progress and the labor market is showing some concerning signs.” ..."
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There’s a great chance the economy is absolutely en fuego in the weeks leading up to the election.
 
lawtig02 said:
There’s a great chance the economy is absolutely en fuego in the weeks leading up to the election.
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Yeah, a 50 bps rate cut would absolutely pop a cork for fourth quart lending, IMO, but we'll see if the Fed remains conservative and starts with 25 bps to gauge the impact.
 
Yep, and Republicans will be kicking and screaming and openly cheering against it every step of the way.
 
nycfan said:
Yeah, a 50 bps rate cut would absolutely pop a cork for fourth quart lending, IMO, but we'll see if the Fed remains conservative and starts with 25 bps to gauge the impact.
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Seems to be even that would lead to a huge boom, but you’d know better than I do.
 
lawtig02 said:
Seems to be even that would lead to a huge boom, but you’d know better than I do.
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Don't get me wrong, there are definitely plenty of deals in a holding pattern waiting for a rate cut, so there should be at least a boomlet from a more conservative cut. But 50 bps might get some capital off the sidelines that isn't currently committed for 3Q24-4Q24.
 
nycfan said:
Yeah, a 50 bps rate cut would absolutely pop a cork for fourth quart lending, IMO, but we'll see if the Fed remains conservative and starts with 25 bps to gauge the impact.
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If they don't cut 50 bps they are insane. It's like they will have learned nothing about policy lags.
 
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