McCarthy says House to vote on GOP stopgap measure this week

On May 6, 2022, I first published an essay explaining why I focus on long-term real rates to evaluate the overall stance of monetary policy, which includes effects from both the setting of the federal funds rate and changes to the Federal Reserve’s balance sheet. Please see that essay for a discussion of why long-term real rates drive economic activity rather than short rates or nominal rates. On June 17, 2022, I then published an update to reflect both increases in inflation and actions by the Federal Open Market Committee (FOMC) to tighten policy in response. This essay is an update to those earlier versions in order to assess where we are in our inflation fight some 15 months later. In the ensuing time, inflation climbed further but then fell dramatically, in part due to policy tightening by the FOMC. Although annual inflation remains well above our target (Figure 1), there is no question we have made a lot of progress towards our 2 percent goal. And after climbing last year, near-term inflation expectations have returned to levels broadly consistent with their levels before the pandemic (Figure 2). This suggests market participants believe the inflation fight will soon have been won. post: FED'S KASHKARI: I PUT A 60% PCT PROBABILITY ON A SOFT LANDING post: KASHKARI: I PUT A 40% PROBABILITY ON A SCENARIO WHERE FED WILL HAVE TO RAISE RATES SIGNIFICANTLY HIGHER TO BEAT INFLATION

The U.S. Census Bureau and the U.S. Department of Housing and Urban Development jointly announced the following new residential sales statistics for August 2023. New Home Sales ...