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

Date	Event	Survey	Actual	Prior	Revised
9/20/2023	MBA Mortgage Applications	—	5.40%	-0.80%	—
9/20/2023	FOMC Rate Decision (Upper Bound)	5.50%	—	5.50%	—
9/20/2023	FOMC Rate Decision (Lower Bound)	5.25%	—	5.25%	—
9/20/2023	Interest on Reserve Balances Rate	5.40%	—	5.40%	—
9/21/2023	Current Account Balance	-$221.0b	—	-$219.3b	—
9/21/2023	Initial Jobless Claims	225k	—	220k	—
9/21/2023	Continuing Claims	1692k	—	1688k	—
9/21/2023	Philadelphia Fed Business Outlook	-1	—	12	—
9/21/2023	Existing Home Sales	4.10m	—	4.07m	—
9/21/2023	Existing Home Sales MoM	0.70%	—	-2.20%	—
9/21/2023	Leading Index	-0.50%	—	-0.40%	—
9/22/2023	S&P Global US Manufacturing PMI	48.2	—	47.9	—
9/22/2023	S&P Global US Services PMI	50.7	—	50.5	—
9/22/2023	S&P Global US Composite PMI	50.4	—	50.2	—
9/25/2023	Chicago Fed Nat Activity Index	—	—	0.12	—
9/25/2023	Dallas Fed Manf. Activity	—	—	-17.2	—
9/26/2023	Philadelphia Fed Non-Manufacturing Activity	—	—	-13.1	—
9/26/2023	Bloomberg Sept. United States Economic Survey
9/26/2023	FHFA House Price Index MoM	—	—	0.30%	—
9/26/2023	S&P CoreLogic CS 20-City MoM SA	—	—	0.92%	—
9/26/2023	S&P CoreLogic CS 20-City YoY NSA	—	—	-1.17%	—
9/26/2023	S&P CoreLogic CS US HPI YoY NSA	—	—	-0.02%	—
9/26/2023	New Home Sales	700k	—	714k	—
9/26/2023	New Home Sales MoM	-2.00%	—	4.40%	—
9/26/2023	Conf. Board Consumer Confidence	106.5	—	106.1	—
9/26/2023	Conf. Board Present Situation	—	—	144.8	—
9/26/2023	Conf. Board Expectations	—	—	80.2	—
9/26/2023	Richmond Fed Manufact. Index	—	—	-7	—
9/26/2023	Richmond Fed Business Conditions	—	—	1	—
9/26/2023	Dallas Fed Services Activity	—	—	-2.7	—
9/27/2023	MBA Mortgage Applications	—	—	5.40%	—
9/27/2023	Durable Goods Orders	-0.50%	—	-5.20%	—
9/27/2023	Durables Ex Transportation	-0.10%	—	0.40%	—
9/27/2023	Cap Goods Orders Nondef Ex Air	—	—	0.10%	—
9/27/2023	Cap Goods Ship Nondef Ex Air	—	—	-0.30%	—

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