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.
Associate, Investment Management Group
|9/18/2019||MBA Mortgage Applications||—||-0.10%||2.00%||—|
|9/18/2019||Housing Starts MoM||5.00%||12.30%||-4.00%||-1.50%|
|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||Bloomberg Consumer Comfort||—||—||63.2||—|
|9/19/2019||Bloomberg Economic Expectations||—||—||48.5||—|
|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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