The housing market is crazy! More than one industry professional has reached that conclusion, watching trends that seem inconsistent, if not contradictory.Read More
The Federal Reserve’s decision to cut rates by a quarter-of-a-point this month didn’t surprise anyone – but it also did little to satisfy either critics (including two Fed dissenters) who thought the reduction was unnecessary (and possibly harmful) or President Trump, who has been demanding larger cuts to boost economic growth.
Reflecting the impact of the simmering (trade war with China and the threat of tariffs on Mexican goods, the employment picture darkened considerably in May. Employers added only 75,000 workers to their payrolls, way below the 180,000 analysts had expected, while estimates for March and April were also scaled back.
Will they, or won’t they? The ‘they’ is the Federal Reserve and the question is whether the policy-setting Federal Open Market Committee (FOMC) will lower interest rates when it meets next in late July. The committee voted 9-1 in June to leave rates unchanged, but a post-meeting statement, eliminating previous references to “patience,” signaled a willingness to consider a rate cut, though probably not before next year. The statement also downgraded the committee’s assessment of economic strength from “solid” to “moderate.”
If you’re looking for consistency, you won’t find it in recent economic reports, which seem to reflect the oft-heard complaint that economists “point in all directions.” Underscoring that point, Barron’s reported recently that the International Monetary Fund has scaled back its forecast for this year “as economic pessimism grows,” while a Housing Wire headline announced much more cheerfully that “Recession Fears Diminish as the Nation Approaches a Goldilocks Economy.”