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Friday, June 21, 2024

S&P 500 Remains Stable after Mixed Housing Data and Fed Speech

Key Takeaways:

  • The housing data released today showed a decline in both housing starts and building permits for March, with housing starts falling by 14.7% month-over-month.
  • Building permits also fell by 4.3%, more than the expected 0.7% drop.
  • In his speech, Vice Chair Jefferson discussed the evolution of monetary policymaking in the presence of economic uncertainty.

Housing Data and Market Reaction

Today was a mixed economic day, with the latest housing data and the speech by Fed Vice Chair Philip N. Jefferson. As of 3:20 PM EST, the DXY has increased by 0.11%, and the S&P 500 by 0.15%. Gold increased slightly and Silver decreased by nearly 2%. I imagine the markets are still factoring in the latest data from Iran’s attack on Israel.

The housing data released today showed a decline in both housing starts and building permits for March, with housing starts falling by 14.7% month-over-month, well below the consensus estimate of a 0.8% decline. Building permits also fell by 4.3%, more than the expected 0.7% drop.

Fed Speech

In his speech, Vice Chair Jefferson discussed the evolution of monetary policymaking in the presence of economic uncertainty. He reviewed historical examples from the 1960s to the present day, emphasizing how economic thinking has changed over time. Jefferson said that when uncertainty is high, policymakers should sometimes act quickly and sometimes act cautiously, depending on the circumstances. He also stated that while simple monetary policy rules are appealing, rigid adherence to their rules is unnecessary, and policymakers should adapt to the evolution of the economy.

Jefferson also stated that while inflation has come down significantly over the past year, it is still running above the Federal Reserve’s 2% goal. He expects first-quarter economic growth to slow down but remain solid. However, he also acknowledged that recent readings on both job gains and inflation have come in higher than expected, adding to the uncertainty.

Jefferson’s baseline outlook is that inflation will decline further with the policy rate held steady at its current level and that the labor market will remain strong. However, he emphasized that if incoming data suggest that inflation is more persistent than currently expected, it will be appropriate to hold the current restrictive stance of policy for longer. He repeated his commitment to getting inflation back to 2%.

Lazarus
Lazarushttps://ljlnews.com
Publisher and editor of LJLNews. I am a Stock Market enthusiast, with an interest for politics. I hope you enjoy reading the articles! Contact me at: Lazaruslucas@ljlnews.com

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