Today's Economic Data Highlights
After the housing starts, we have the Fed executing multiple tranche open mouth operations as no fewer (and hopefully no more!) than seven members of the FOMC (not all voting) are on the docket….
8:30: Housing starts and permits for Sep…a modest setback? Last month’s report featured a second consecutive increase of more than 30% in multifamily starts. The first one reversed a similar decline in June; the second carried activity in this sector to a level well above what we think can be sustained given the high rental vacancy rate (160,000). Accordingly, like most other analysts, we expect a correction in this sector. Single-family starts, at an annual rate of 438,000, are at a more sustainable level.
On starts, median forecast (of 71) -3.0%, ranging from -8% to +4.4%; last +10.5%.
On permits, median forecast (of 53) +0.7%, ranging from -3.7% to +4.4%; last +1.8%.
9:30: New York Fed President William Dudley speaks at a regional economic briefing…He’s already voiced his views on issues before the FOMC; that plus the local character of this appearance—one in a series—suggests that his remarks today are unlikely to have significant policy implications.
9:40: Chicago Fed President Charles Evans speaks on the economic outlook….Mr. Evans has likewise been prominently on the tape lately, notably in favor of considering price-level targeting and expressing the view that the case for further action by the FOMC is so compelling as not to be significantly data dependent. He is not currently a voting member of the FOMC; his next turn comes in 2011.
11:30: Atlanta Fed President Dennis Lockhart speaks on the economy….Yesterday’s speech before the Savannah Rotary Club voiced sympathy with the idea of “more monetary stimulus in the near future” and advocated adoption of “a more explicit inflation objective.” It’s unlikely that he will say much more today as he speaks to the Southeast US Japan Association meeting in Nashville, TN. Mr. Lockhart is not currently a voting member of the FOMC; his next turn comes in 2012.
12:50: Dallas Fed President Richard Fisher speaks to the New York Association for Business Economics…He was all over the tape yesterday in a CNBC interview, saying—according to wire service headlines—that the US economy’s 2% growth rate was “stall speed,” that companies saw no incentive to hire, that further Fed stimulus might undercut the demand for riskier assets, and that the Fed should not shoulder the burden of spurring growth alone. Today’s speech should provide a more structured version of all this. Mr. Fisher is not currently a voting member of the FOMC; his next turn comes in 2011.
13:20: Minneapolis Fed President Narayana Kocherlakota speaks on the Federal Open Market Committee…in Fargo, ND. If this speech follows the pattern of recent appearances, it will be somewhat educational in nature as to what the FOMC does and also discuss some of the tools at its disposal to deal with the current situation—changing the interest rate on reserves, communicating about the likely path of short-term rates, and quantitative easing. He has been noncommittal in revealing where he stands on QE, which represents either a shift or a clarification from the resistance attributed to him in a Wall Street Journal article last month. He is not currently a voting member of the FOMC; his next turn comes in 2011.
16:00: Federal Reserve Chairman Ben Bernanke participates in the opening of a Junior Achievement Finance Park….in Fairfax, VA. This is unlikely to involve market-moving comments, especially as he just spoke last week.
17:00: ABC consumer comfort index…It’s been bouncing between -47 and -45 lately, last at -45.
19:00: Federal Reserve Governor Elizabeth Duke speaks on “Come With Me to the FOMC”…to the New York University Money Marketeers Club. To our knowledge, she has not commented much on QE or other monetary policy issues. Most of her public appearances recently have been at hearings on mortgage disclosure and related issues.
From Goldman Sachs