Interest Rates, Profit Margins, New Home Prices
July 27, 2023 | FIRESIDE CHARTS
The Federal Reserve raised interest rates, bringing the upper bound of their target rate range to 5.50%. This is widely expected to be the final rate hike, but in his press conference Chair Powell indicated that he expects rates to remain at this level for an extended period of time. As long as U.S. economic momentum continues, the Federal Reserve is likely to lean towards keeping monetary policy tight. Consumer spending is showing no signs of stopping and consumer sentiment has begun to turn higher. Pandemic era excesses continue to correct. New house prices. Inflation linked debt.
1. The FOMC offered very little new information in their statement and Chair Powell reiterated that future actions will be data dependent in his press conference:
Source: The Daily Shot 7/27/2023
2. Due to fixed rate loans, large portions of the economy have been insulated from higher interest rates:
Source: @albertedwards99 Read full article
3. The U.S. consumer’s continued strength has been an outlier among other developed countries:
Source: Capital Economics
4. The discrepancy between the Conference Board and University of Michigan sentiment surveys remains but both have turned higher as of late:
5. The wealth effect of rising stock prices likely influences consumer sentiment:
Source: The Daily Shot 7/26/2023
6. S&P 500 profit margins are back to pre-pandemic levels:
Source: FactSet Read full article
7. The equity bear market appears to be over, but the IPO window has yet to re-open:
Source: S&P Global Market Intelligence
8. While existing home prices remain elevated due to limited supply, homebuilders are fulfilling demand at lower prices:
9. Continued inflation will create a difficult fiscal situation for the United Kingdom:
Source: @WSJ Read full article
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