September 20, 2023 Headlines

U.K. inflation came in lower than expected in August, sparking a modest rally in Treasuries ahead of this afternoon’s FOMC announcement. Markets are not expecting a rate hike from the Fed today, but there is still uncertainty related to the committee’s guidance, particularly the updated Summary of Economic Projections (SEP). In the June SEP, the median forecast for the fed funds rate showed a 5.625% terminal rate this year (one more 25 basis point hike) and 100 basis points of rate cuts in 2024. If the 2023 forecast remains unchanged, how will the 2024 forecast change, if it all, and how will Fed Chair Powell frame the committee’s debate regarding the conditions for removing some of the restrictive policy in the coming year? Also, will the median forecast for the longer-term funds rate be increased from 2.5%, which has a greater impact on the long end of the rates curve? Current pricing in the fed funds futures markets shows a terminal rate of 5.44% and just 85 basis points of rate cuts in 2024. In July, the market was priced for more than 150 basis points of rate cuts next year.

Jason Haley
Chief Investment Officer

9/20/2023MBA Mortgage Applications5.40%-0.80%
9/20/2023FOMC Rate Decision (Upper Bound)5.50%5.50%
9/20/2023FOMC Rate Decision (Lower Bound)5.25%5.25%
9/20/2023Interest on Reserve Balances Rate5.40%5.40%
9/21/2023Current Account Balance-$221.0b-$219.3b
9/21/2023Initial Jobless Claims225k220k
9/21/2023Continuing Claims1692k1688k
9/21/2023Philadelphia Fed Business Outlook-112
9/21/2023Existing Home Sales4.10m4.07m
9/21/2023Existing Home Sales MoM0.70%-2.20%
9/21/2023Leading Index-0.50%-0.40%
9/22/2023S&P Global US Manufacturing PMI48.247.9
9/22/2023S&P Global US Services PMI50.750.5
9/22/2023S&P Global US Composite PMI50.450.2
9/25/2023Chicago Fed Nat Activity Index0.12
9/25/2023Dallas Fed Manf. Activity-17.2
9/26/2023Philadelphia Fed Non-Manufacturing Activity-13.1
9/26/2023Bloomberg Sept. United States Economic Survey
9/26/2023FHFA House Price Index MoM0.30%
9/26/2023S&P CoreLogic CS 20-City MoM SA0.92%
9/26/2023S&P CoreLogic CS 20-City YoY NSA-1.17%
9/26/2023S&P CoreLogic CS US HPI YoY NSA-0.02%
9/26/2023New Home Sales700k714k
9/26/2023New Home Sales MoM-2.00%4.40%
9/26/2023Conf. Board Consumer Confidence106.5106.1
9/26/2023Conf. Board Present Situation144.8
9/26/2023Conf. Board Expectations80.2
9/26/2023Richmond Fed Manufact. Index-7
9/26/2023Richmond Fed Business Conditions1
9/26/2023Dallas Fed Services Activity-2.7
9/27/2023MBA Mortgage Applications5.40%
9/27/2023Durable Goods Orders-0.50%-5.20%
9/27/2023Durables Ex Transportation-0.10%0.40%
9/27/2023Cap Goods Orders Nondef Ex Air0.10%
9/27/2023Cap Goods Ship Nondef Ex Air-0.30%


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