Morning Report: Jackson Hole recap

Posted on August 28, 2023 by Brent Nyitray

Vital Statistics:

Stocks are higher this morning on no real news. Bonds and MBS are up.

We have a heavy week of data coming up with home prices and consumer confidence on Tuesday, GDP on Wednesday, the PCE Price Index on Thursday, and the jobs report on Friday. The PCE Price Index (the Fed’s preferred inflation measure) will be the most important number this week followed by the jobs report on Friday.

Jerome Powell’s speech at Jackson Hole last week didn’t break any new ground – he basically stressed that the Fed remains committed to getting inflation down to 2% and that interest rates are restrictive. They will remain restrictive for a some time.

Bloomberg asked Philly Fed President Patrick Harker if the Fed had “destroyed the mortgage market for a generation.” Harker acknowledged that it is really tough out there, especially for first-time homebuyers who are struggling with high rates and limited inventory. He said “that’s why I think we don’t keep going with rates.” He noted that the homebuilders are doing well, and that there is a lot of multi-family inventory coming on line. Still, housing (un)affordability is back at levels last seen during the financial crisis.

While housing affordability concerns are not part of the Fed’s job description, I am sure Washington doesn’t want to see this continue, especially going into an election year. I have to imagine the administration is whispering into Powell’s ear, advocating for the Fed do something about housing.

The Atlanta Fed’s GDP Now model got a lot of mentions at the conference. It currently sees Q3 GDP growth at 5.9%, which would be the strongest growth since 1983, aside from the post-lockdown rebound. I discussed it in my latest Substack and took a close look at the numbers. Check it out and please consider subscribing.

Guild Mortgage has acquired First Centennial Mortgage, based in the Midwest. Terms of the transaction were not disclosed.

ICE and Black Knight have entered into a consent decree with the FTC that will allow their merger to close on September 5. The companies agreed to divest Empower and Optimal Blue to Constellation Software in order to alleviate antitrust concerns.

Filed under: Economy |

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5 Responses

  2. jnc4p's avatar
    jnc4p, on August 28, 2023 at 4:33 pm said:

    The sources are of course biased, but the essential insight is valid. Being indicted is the best thing that’s happened to Trump campaign wise.

    “Even more than during the gripping performance of his various indictments, the theatre of his trials will subsume politics. There will not be another campaign, some semblance of a normal campaign of the past, a fantasy campaign, separate from Trump’s trials. The scenes from courtroom to courtroom will overlap with the primaries – the final ones taking place on 4 June 2024 – only intensifying the zeal of his base. And then Trump’s battle with the law will engulf the general election.

    The trials are a continuous spectacle, featuring an all-star cast in far-flung locations. Political reporters are barely heard from, while legal analysts fill the airwaves. Every twist and turn, every motion, every argument is the breathless lead story. Everyone, from prosecutors to co-conspirators, named and unnamed, indicted and unindicted, are characters in Trump’s new reality show – part violent action movie (the insurrection), part sleazy porn flick (Stormy Daniels), part conspiracy thriller (Mar-a-Lago), and part mafia drama (the fake elector racket).

    But the Trump trials are more than his means; they are his ends. The trials are not the sideshow, but the heart and soul of Trump’s campaign. They have become his essential fundraising tool to finance his defense, his platform for whipping up his followers into a constant state of excitement, and his instrument for dominating the media to make himself the center of attention and blot out coverage of anyone else.

    The trials are the message. They are the drama around which Trump plays his role as the unjustly accused victim, whose rights are trampled and who is the martyr for his oppressed “deplorables”. He is taking the slings and arrows for them. The narcissist is the self-sacrificing saint. The criminal is the angel. The liar is the truth-teller. “

    https://www.theguardian.com/commentisfree/2023/aug/21/trump-election-giuliani-sidney-blumenthal

    https://newrepublic.com/article/175212/trumps-trials-campaign-2024-maga

    “It didn’t have to be this way. In the immediate aftermath of the 2022 midterms, which were disappointing for many Republicans, there was a brief moment where it seemed like the party might take a step back, reflect and decide to pursue a new approach — with new leadership. In my own polling immediately following the election, I found the Florida governor Ron DeSantis running even with Donald Trump in a head-to-head matchup among likely Republican primary voters, a finding that held throughout the winter. Even voters who consider themselves “very conservative” gravitated away from Mr. Trump and toward the prospect of an alternative for a time.

    But by the end of the spring 2023, following the Manhattan district attorney Alvin Bragg’s indictment of Mr. Trump and Mr. DeSantis’s rocky entrance into the presidential race, not only had Mr. Trump regained his lead, he had expanded upon it. Quinnipiac’s polling of Republican primary voters showed that Mr. Trump held only a six-point lead over Mr. DeSantis in February, but that lead had grown to a whopping 31 points by May.”

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    • Brent Nyitray's avatar
      Brent Nyitray, on August 28, 2023 at 4:43 pm said:

      I don’t think the NYT writer has it correct. I think most Republicans don’t necessarily like Trump and are aware of his weaknesses.

      That said, they REALLY hate the democrats, and Trump is the only one that actually takes them on.

      Who would you rather back? A flawed fighter or a RINO with a “kick me” sign on his back?

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    • Let the mutherfuker burn!'s avatar
      Let the mutherfuker burn!, on August 28, 2023 at 7:31 pm said:

      It’s all irrelevant, Trump will be removed from the ticket by the party, be convicted in all jurisdictions and die in prison. The Republican losses in ‘24 and again in ‘28 will essentially eliminate the party.

      It is what it is.

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