Daily Trader: Housing Starts & Fed Anticipation #shorts

Housing starts and permits missed expectations, signaling economic weakness. The focus is on Kevin Warsh's first Fed meeting, where he is expected to prioritize shrinking the balance sheet, reducing forward guidance, and adopting trimmed mean PCE as a key inflation measure. This policy mix could lower yields and impact housing, consumer spending, and small businesses.

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Fed balance sheet sharp down

Charles Schwab 7.8
Asset Manager $890.00B
Kevin Hincks 4.0

Daily Trader: Housing Starts & Fed Anticipation #shorts

rut

Small businesses will be affected by balance sheet reduction and lower rates, suggesting potential headwinds for the Russell 2000.

yields

Warsh wants to shrink the balance sheet while bringing down interest rates, implying downward pressure on nominal yields.

Housing starts fell sharply from 1.465 million to 1.177 million, a big miss versus expectations of 1.4 million. Permits also missed at 1.413 million versus 1.43 million expected.

Speaker1
Housing will be a focus of the Trump administration and Kevin Warsh, whose first Fed meeting is today.

Speaker1
Kevin Warsh favors less Fed communication, a narrow focus on price stability, and less forward guidance. He is not a fan of the Summary of Economic Projections.

Speaker1
Warsh wants to shrink the Fed balance sheet from $6.7 trillion significantly lower. He opposed quantitative easing and resigned in 2011 over it.

Speaker1
Shrinking the balance sheet while bringing down interest rates will affect housing, the US consumer, and small businesses.

Speaker1
Watch for trimmed mean PCE from the Dallas Fed to be implemented by Kevin Warsh.

Speaker1

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