Play it cool, guys: Both CPI and PPI were kind to us. CPI came in -.4% for the month, the biggest drop since April 2020. PPI came in -.3% for the month. That puts us at 3.5% and 5.5% annualized inflation, respectively. The core inflation for both was essentially flat.
The Fed Likes That: With no more significant news between now and the next Fed Meeting, this gives Warsh what he needs to pause on any potential rate hikes for the summer. We're still at a 50% chance for September, since we need to see a trend versus an exception.
Builders Building: Builders increased and hit 19% for housing starts, well above the expectations. However, their confidence went down for a 15th month in a row. Sales were down, 6 month-expectations were down, and price cuts and incentives both up. Permits showed down as well, with the overall picture being that they're trying to get homes up and sold now versus later.
Road to Housing: Passed! But it's a long road. The Act doesn't have much in the way of short-term benefits to builders (or lenders), but I see it as progress in the right direction.