Nick Timiraos

Nick Timiraos


Chief economics correspondent, The Wall Street Journal • Author, "Trillion Dollar Triage," on sale now

211042 followers  •  120 follow  •    •   http://www.nicktimiraos.com

The November jobs report keeps the Federal Reserve on track to raise interest rates by 50 basis points at its meeting in two weeks and underscores the risk that officials will raise rates above 5% in the first half of next year.

One chart that might be particularly unnerving to policy makers is what average hourly wage growth looked like as of the October report (3.9% on a 3-month annualized basis) versus now (5.8%)

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Fed officials have clearly signaled plans to raise rates by 50 basis points at their meeting next week Elevated wage pressures could muddy the debate over 50 v 25 in February and lead officials to pencil in more hikes next year

Snapshot of a housing market: Existing single-family home sales in Las Vegas were down 54% in November from a year ago. Listings without any offer in November rose 162% from a year earlier. Median home prices were up 3% from a year ago.

The Bank of Canada raised its policy rate by 50 basis points on Wednesday to 4.25% Statement: "Looking ahead, Governing Council will be considering whether the policy interest rate needs to rise further..."

Economists who have been anticipating lower inflation are now more confident in those forecasts because new apartment lease rents are decelerating This will eventually feed through to U.S. inflation gauges, but not immediately

The US housing market is going through a hard stop after a massive rate shock ended a "bubble," in Fed Chair Jay Powell's words. Buyers face monthly payments up 50% from a year ago. Sales are plunging, and prices are declining w @NicoleFriedman 

How long the slump lasts depends in part on how long it takes to get control of inflation. Economists at Fannie Mae and Goldman Sachs are projecting sales of existing homes falling below 4 million next year, a level that was never breached during the 2006-11 bust.

Several economists now expect double-digit peak-to-trough price declines. John Burns Real Estate Consulting, @IanShepherdson  and @DianeSwonk  expect declines of around 20%. Ivy Zelman sees prices falling 12%. Goldman has them down around 10%.

Fed officials don't sound particularly troubled. Governor Christopher Waller last month noted prices were up 40-45% in two years, so even if prices fall 15%, many homeowners are fine. “If you bought at the peak and you put very little money down—yeah, you’re in some trouble."

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Consumers have a big cushion of savings. Corporations have lowered their debt-service costs. For the Fed, a more resilient private sector means that when it comes to rate rises, the peak or “terminal” policy rate may be higher than expected.

DNC leak gives Trump campaign opening to tie it all back to potential vulnerability of Clinton's personal servers

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Fed hikes by 75 basis points. New sentence in the FOMC statement signals more increases but hints at possibly smaller increments

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Fed governor Christopher Waller on the October CPI report: "The market seemed to get waaaa-aaaay out in front.... I just cannot stress this is one data point." "We've still got a ways to go."

The Fed is barreling towards a fourth straight 75-basis-point rate rise at the November FOMC meeting. That meeting could serve as a critical staging ground for future plans, including whether and how to step down to 50 basis points in December

Just another Wednesday night on the Twitter

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