Housing starts inched ahead in August to 891,000 from 881,000 in July (seasonally adjusted annual rate), the US Census Bureau reports. The August number was quite a bit lower than the consensus forecast, although it was in line with The Capital Spectator’s average econometric projection (see yesterday’s preview). Thanks to a revision that lowered July’s initial estimate, today’s August number posted a slight gain over the previous month. Nonetheless, it’s clear that higher interest rates are creating headwinds for housing.
Daily Archives: September 18, 2013
Will Today Mark The Beginning Of The End For Monetary Stimulus?
The Federal Reserve is widely expected to announce later today that it will begin winding down its $85-billion-a-month bond-buying program. Not surprisingly, there’s a wide range of opinion on the wisdom, or the lack thereof, of this anticipated change in policy. On one extreme is the view that it’s too early to begin tapering monetary stimulus because economic growth remains fragile, particularly on the employment front. At the opposite spectrum is the hawkish view that embracing monetary rectitude is long past due in order to keep inflationary pressures in check after five years of extraordinary stimulus. This much is clear, however: inflation expectations remain relatively stable and low and the macro outlook is improving these days, which lays the groundwork for thinking that the Fed may be inclined to reverse course on the margins.