Slow news week? After the fireworks and 250th celebration last week, this week we saw a slow week. MBA applications were down 2.2% for the week with Independence Day adjusted, and rates up just 6BPS. That's a win, considering the bump up in oil prices as the Iranian conflict started again.
Existing Home Sales... don't sell: We saw NAR existing home sales for June decrease by 2.4% for the month, a solid miss. Median price was $440K, and inventory crept up again.
Fed Minutes: The minutes from the Fed were shorter than normal, which Warsh had promised to do. They revealed an even split among members for a rate hike. There was growing concern over inflation but some calm due to the stabilized labor worries. Note that these comments are from before the jobs numbers last week.
Fed Task Forces: The members of the Fed task force came out. It probably warrants an entire post on its own, but here are the summaries:
Communication: A bias against forward guidance. "Do more, say less". I predict the dot plot is killed off.
Balance Sheets: A big impact in our world, members across the spectrum but a consistent bias against large MBS on the Fed balance sheet. Less great for us.
Data: Lots of private executives that have good intel on data from current sources. Likely to be used for CPI complements.
Productivity/Jobs: All very pro-AI, including Mr. A26Z himself. This is highly likely to go with Warsh's theory that AI is pro-productivity and building a case to back out AI from inflationary measures.
Inflationary Panel: The most complicated for analysis, and the most likely to be hawkish.
Net net? I think this makes the basis for Warsh's alternative inflationary models to build the case for future rate cuts.