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

Date	Event	Survey	Actual	Prior	Revised
9/18/2019	MBA Mortgage Applications	—	-0.10%	2.00%	—
9/18/2019	Housing Starts	1250k	1364k	1191k	1215k
9/18/2019	Housing Starts MoM	5.00%	12.30%	-4.00%	-1.50%
9/18/2019	Building Permits	1300k	1419k	1336k	1317k
9/18/2019	Building Permits MoM	-1.30%	7.70%	8.40%	6.90%
9/18/2019	FOMC Rate Decision (Upper Bound)	2.00%	—	2.25%	—
9/18/2019	FOMC Rate Decision (Lower Bound)	1.75%	—	2.00%	—
9/18/2019	Interest Rate on Excess Reserves	1.85%	—	2.10%	—
9/19/2019	Current Account Balance	-$127.4b	—	-$130.4b	—
9/19/2019	Philadelphia Fed Business Outlook	10.5	—	16.8	—
9/19/2019	Initial Jobless Claims	213k	—	204k	—
9/19/2019	Continuing Claims	1672k	—	1670k	—
9/19/2019	Bloomberg Consumer Comfort	—	—	63.2	—
9/19/2019	Bloomberg Economic Expectations	—	—	48.5	—
9/19/2019	Leading Index	-0.10%	—	0.50%	—
9/19/2019	Existing Home Sales	5.38m	—	5.42m	—
9/19/2019	Existing Home Sales MoM	-0.70%	—	2.50%	—
9/20/2019	Household Change in Net Worth	—	—	$4691b	—

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