March 23, 2020 Headlines

The Fed continues to dig deeper into its war chest in an effort to ease market conditions. The QE program for Treasury and agency MBS no longer has an amount tied to it, with the central bank now committed to buy securities in “the amounts needed to support smooth market functioning.” The Fed will also now include agency CMBS as part of its MBS purchases, which is certainly needed given the significant spread widening that occurred in that sector last week. The Fed is also launching additional credit facilities to support corporate, municipal, and asset-backed bonds. This is about as close as it gets to a “shock and awe” campaign from a monetary policy perspective, and the Fed also said it expects to soon announce the establishment of a Main Street Business Lending Program to support lending to small-and-medium size businesses.

Treasury prices are unchanged to slightly higher at the moment, but agency MBS spreads are tightening relative to rates, which is a positive signal given the very volatile and sloppy pricing action last week. All eyes are now on Congress, which struggled yesterday to come to terms with a fiscal stimulus package (currently expected to be $2 trillion). Both sides will hopefully come to an agreement early this week.

Jason Haley
Chief Investment Officer

Date	Event	Survey	Actual	Prior	Revised
3/23/2020	Chicago Fed Nat Activity Index	-0.35	0.16	-0.25	-0.33
3/24/2020	Markit US Manufacturing PMI	43	—	50.7	—
3/24/2020	Markit US Services PMI	42	—	49.4	—
3/24/2020	Markit US Composite PMI	—	—	49.6	—
3/24/2020	Revisions: Wholesale Inventories
3/24/2020	New Home Sales	750k	—	764k	—
3/24/2020	New Home Sales MoM	-1.80%	—	7.90%	—
3/24/2020	Richmond Fed Manufact. Index	-15	—	-2	—
3/25/2020	MBA Mortgage Applications	—	—	-8.40%	—
3/25/2020	Durable Goods Orders	-1.00%	—	-0.20%	—
3/25/2020	Durables Ex Transportation	-0.40%	—	0.80%	—
3/25/2020	Cap Goods Orders Nondef Ex Air	-0.40%	—	1.10%	—
3/25/2020	Cap Goods Ship Nondef Ex Air	-0.20%	—	1.00%	—
3/25/2020	FHFA House Price Index MoM	0.40%	—	0.60%	—
3/26/2020	Advance Goods Trade Balance	-$63.5b	—	-$65.5b	-$65.9b
3/26/2020	Wholesale Inventories MoM	-0.40%	—	-0.40%	—
3/26/2020	Retail Inventories MoM	—	—	0.00%	—
3/26/2020	GDP Annualized QoQ	2.10%	—	2.10%	—
3/26/2020	Personal Consumption	1.70%	—	1.70%	—
3/26/2020	GDP Price Index	1.30%	—	1.30%	—
3/26/2020	Core PCE QoQ	1.20%	—	1.20%	—
3/26/2020	Initial Jobless Claims	1400k	—	281k	—
3/26/2020	Continuing Claims	1782k	—	1701k	—
3/26/2020	Bloomberg Consumer Comfort	—	—	63	—
3/26/2020	Kansas City Fed Manf. Activity	-10	—	5	—
3/27/2020	Personal Income	0.40%	—	0.60%	—
3/27/2020	Personal Spending	0.20%	—	0.20%	—
3/27/2020	Real Personal Spending	0.20%	—	0.10%	—
3/27/2020	PCE Deflator MoM	0.10%	—	0.10%	—
3/27/2020	PCE Deflator YoY	1.70%	—	1.70%	—
3/27/2020	PCE Core Deflator MoM	0.20%	—	0.10%	—
3/27/2020	PCE Core Deflator YoY	1.70%	—	1.60%	—
3/27/2020	U. of Mich. Sentiment	89.5	—	95.9	—
3/27/2020	U. of Mich. Current Conditions	—	—	112.5	—
3/27/2020	U. of Mich. Expectations	—	—	85.3	—
3/27/2020	U. of Mich. 1 Yr Inflation	—	—	2.30%	—
3/27/2020	U. of Mich. 5-10 Yr Inflation	—	—	2.30%	—

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