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Author Jason Haley

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It’s a relatively calm tone in the bond market ahead of this afternoon’s FOMC decision, with Treasury yields up 1-2 basis points on the day.

A third consecutive rate cut is widely expected today and fully priced into fed fund futures. Today’s bigger focus for market participants will be the updated Summary of Economic Projections, including the dot plot, and any other forward guidance from Powell during his press conference. The market is currently priced for a neutral/terminal fed funds rate of around 3.75%, a little more than three 25 basis point rate cuts in total including today. The last dot plot from September showed a 2.875% terminal rate projection (median forecast). There is still ample uncertainty related to the timing and substance of policy initiatives from the incoming Trump administration related to taxes, immigration, tariffs, etc., making economic and monetary policy forecasts even more challenging for 2025 and beyond.

Jason Haley
Chief Investment Officer

DateEventSurveyActualPriorRevised
12/18/2024MBA Mortgage Applications—-0.70%5.40%—
12/18/2024Housing Starts1345k1289k1311k1312k
12/18/2024Housing Starts MoM2.60%-1.80%-3.10%-3.20%
12/18/2024Building Permits1430k1505k1416k1419k
12/18/2024Building Permits MoM1.00%6.10%-0.60%-0.40%
12/18/2024Current Account Balance-$287.1b-$310.9b-$266.8b-$275.0b
12/18/2024FOMC Rate Decision (Upper Bound)4.50%—4.75%—
12/18/2024FOMC Rate Decision (Lower Bound)4.25%—4.50%—
12/18/2024Fed Interest on Reserve Balances Rate4.40%—4.65%—
12/18/2024FOMC Median Rate Forecast: Current Yr4.38%—4.38%—
12/18/2024FOMC Median Rate Forecast: Next Yr3.63%—3.38%—
12/18/2024FOMC Median Rate Forecast: +2 Yrs3.13%—2.88%—
12/18/2024FOMC Median Rate Forecast: +3 Yrs3.13%—2.88%—
12/18/2024FOMC Median Rate Forecast: Long-Run3.00%—2.88%—
12/19/2024GDP Annualized QoQ2.80%—2.80%—
12/19/2024Personal Consumption3.60%—3.50%—
12/19/2024GDP Price Index1.90%—1.90%—
12/19/2024Core PCE Price Index QoQ2.10%—2.10%—
12/19/2024Philadelphia Fed Business Outlook2.8—-5.5—
12/19/2024Initial Jobless Claims230k—242k—
12/19/2024Continuing Claims1890k—1886k—
12/19/2024Leading Index-0.10%—-0.40%—
12/19/2024Existing Home Sales4.10m—3.96m—
12/19/2024Existing Home Sales MoM3.50%—3.40%—
12/19/2024Kansas City Fed Manf. Activity-1—-2—
12/19/2024Total Net TIC Flows——$398.4b—
12/19/2024Net Long-term TIC Flows——$216.1b—
12/20/2024Personal Income0.40%—0.60%—
12/20/2024Personal Spending0.50%—0.40%—
12/20/2024Real Personal Spending0.30%—0.10%—
12/20/2024PCE Price Index MoM0.20%—0.20%—
12/20/2024PCE Price Index YoY2.50%—2.30%—
12/20/2024Core PCE Price Index MoM0.20%—0.30%—
12/20/2024Core PCE Price Index YoY2.90%—2.80%—
12/20/2024U. of Mich. Sentiment74.2—74—
12/20/2024U. of Mich. Current Conditions——77.7—
12/20/2024U. of Mich. Expectations——71.6—
12/20/2024U. of Mich. 1 Yr Inflation——2.90%—
12/20/2024U. of Mich. 5-10 Yr Inflation3.10%—3.10%—
12/20/2024Kansas City Fed Services Activity——9—
12/23/2024Chicago Fed Nat Activity Index——-0.4—
12/23/2024Conf. Board Consumer Confidence113—111.7—
12/23/2024Conf. Board Present Situation——140.9—
12/23/2024Conf. Board Expectations——92.3—
12/24/2024Building Permits——1505k—
12/24/2024Building Permits MoM——6.10%—
12/24/2024Philadelphia Fed Non-Manufacturing Activity——-5.9—
12/24/2024Durable Goods Orders-0.40%—0.30%—
12/24/2024Durables Ex Transportation0.20%—0.20%—
12/24/2024Cap Goods Orders Nondef Ex Air——-0.20%—
12/24/2024Cap Goods Ship Nondef Ex Air——0.30%—
12/24/2024New Home Sales663k—610k—
12/24/2024New Home Sales MoM8.70%—-17.30%—
12/24/2024Richmond Fed Manufact. Index——-14—
12/24/2024Richmond Fed Business Conditions——10—

Jason Haley

Chief Investment Officer

LinkedIn

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