September 18, 2019 Headlines

Trading in the overnight session was muted as investors patiently wait for the Federal Reserve to conclude their policy meeting later today. Officials are widely expected to cut the benchmark rate by .25% but all the focus will be on the updated dot plot, FOMC statement, and Powell press conference to gauge future policy action. As mentioned in the previous commentary, there have been discussions of a possible growing divide in future policy action based on the last dot plot, where hawks are more focused on a positive domestic data trend, and the doves are concerned about contagion from abroad (trade, geopolitical, etc.).

Overnight funding rates have calmed down after surging to start the week, as a combination of factors affected both the availability of cash and the demand for funding. In order to alleviate this short-term mismatch, the New York Fed announced yesterday that it would conduct a system open market operation to inject liquidity into the market. Historically, it has been a tool used by the Fed to implement monetary policy. However, it hasn’t been needed in today’s current environment with abundant bank reserves.

Chris Eckhoff
Associate, Investment Management Group

9/18/2019MBA Mortgage Applications-0.10%2.00%
9/18/2019Housing Starts1250k1364k1191k1215k
9/18/2019Housing Starts MoM5.00%12.30%-4.00%-1.50%
9/18/2019Building Permits1300k1419k1336k1317k
9/18/2019Building Permits MoM-1.30%7.70%8.40%6.90%
9/18/2019FOMC Rate Decision (Upper Bound)2.00%2.25%
9/18/2019FOMC Rate Decision (Lower Bound)1.75%2.00%
9/18/2019Interest Rate on Excess Reserves1.85%2.10%
9/19/2019Current Account Balance-$127.4b-$130.4b
9/19/2019Philadelphia Fed Business Outlook10.516.8
9/19/2019Initial Jobless Claims213k204k
9/19/2019Continuing Claims1672k1670k
9/19/2019Bloomberg Consumer Comfort63.2
9/19/2019Bloomberg Economic Expectations48.5
9/19/2019Leading Index-0.10%0.50%
9/19/2019Existing Home Sales5.38m5.42m
9/19/2019Existing Home Sales MoM-0.70%2.50%
9/20/2019Household Change in Net Worth$4691b







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