FED: KC Fed's Schmid: Slightly Restrictive Policy The "Right Place To Be"
Sep-25 13:07
KC Fed President Schmid, who is a 2025 FOMC voter and among the most hawkish members of the Committee, continues to sound concerned over the inflation outlook in a speech Thursday, while acknowledging that some risks to the labor market are emerging. He's probably one of the 6 members who penciled in no further rate cuts this year in his 2025 Dot Plot.
- "I viewed the 25-basis point cut in the policy rate last week as a reasonable risk-management strategy as the Fed balances its inflation objective with some heightened concern over the health of the labor market."
- "My view is that inflation remains too high while the labor market, though cooling, still remains largely in balance."
- He acknowledges "a growing risk that the labor market may weaken more substantially or abruptly than I had been anticipating."
- He says current policy is "slightly restrictive, which I think is the right place to be." He also says he regarded policy earlier in the year amid the long hold at 4.25-4.50% as "modestly restrictive".
- "Against this backdrop, I will continue to take a data-dependent approach to any further adjustments in the policy rate. I will be watching the incoming inflation and labor market data closely as I continue to assess the balance of risks to the Fed’s dual mandate."
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MNI: US Q2 FHFA HPI Q/Q SA -0.0% V +2.9% Q2 2024
Aug-26 13:00
- MNI: US Q2 FHFA HPI Q/Q SA -0.0% V +2.9% Q2 2024
MNI:US JUN FHFA HPI SA -0.2% V -0.1% MAY; +2.6% Y/Y
Aug-26 13:00
- MNI:US JUN FHFA HPI SA -0.2% V -0.1% MAY; +2.6% Y/Y
US DATA: Solid Start To Q3 For Durable Goods Activity
Aug-26 12:57
Durable goods orders showed a pickup in July, with better revisions casting a slightly better light on goods production and business equipment investment this summer.
- Headline durable goods orders bested expectations at -2.8% M/M (-3.8% expected, -9.4% prior), weighed down once again by the extremely volatile nondefense aircraft orders category (-33% M/M, after -53% prior).
- A better signal came from durable orders ex-transportation, which rose 1.1% (0.2% expected) after 0.3% prior. And the key core capital goods orders (nondefense, ex-aircraft) category also rose by 1.1% M/M (0.2% expected), more than reversing June's decline (-0.6%, upwardly revised from -0.8%).
- Meanwhile, core shipments continued to hum along, rising by a 27-month high 0.7% M/M (0.2% expected, 0.4% prior rev from 0.3%).
- Zooming out, core capital goods orders are nor rising at a 3.8% 3M/3M annualized pace, the strongest since March at which point activity was seen to be heavily influenced by tariff front-running.
- The Y/Y NSA figure may tell a clearer story, and it's a positive one: core orders have risen 4.4% Y/Y by that measure for two consecutive months, the best seen since Q4 2022.
- Category-wise, there was strength pretty much across the board, with metal products, machinery, computers/electronics, and electrical equipment/appliances/ components, and motor vehicles and parts all seeing a rise in new orders (we exclude volatile aircraft).
- One note of caution here is that the figures are in nominal dollar terms and thus may be reflecting a bottoming out of goods / components prices in addition to orders volumes. But momentum appears to be headed back in a positive direction, at least tentatively.
