As the fallout from Jackson Hole continues to ripple through markets, investors have their eyes on more drama stemming from the central bank. The Federal Reserve this week is set to raise the throttle of its quantitative tightening (QT) program by picking up the pace at which it unwinds its balance sheet. Note that the central bank is not selling its Treasury holdings outright, but is rather letting them mature to shrink its balance sheet. After an initial few months at a slower pace, monthly caps for offloading Treasuries is set to double to $65bn.
Home prices in June were 18% higher than during the same month last year, according to the S&P CoreLogic Case-Shiller Indices. In the last 35 years, only four complete years have witnessed increases that large. Another report last week showed home prices declined 0.77% from June to July. While the drop may seem small, it is the largest single-month decline in prices since January 2011. It is also the second-worst July performance dating back to 1991
U.S. airline sales took a sizable step back during the last week of data tracked by Bank of America, and the team thinks that if the booking softness is not reversed in the next couple of weeks, it would indicate more of an underlying demand problem. Bookings were down -23.6% vs. the level seen in 2019 for the week ending August 21.