Gregory Heym is Chief Economist at Brown Harris Stevens. His weekly series, The Line, covers new developments to the economy, including trends and forecasts. Read on for the latest report and subscribe here to receive The Line in your inbox.
In this issue, I'll tell you what the Fed said about rates, the best time to buy a home this year, and what I did Wednesday night.
The Fed Takes Another Month Off
As expected, the Federal Reserve left rates unchanged after their meeting this week, the second time in the past three meetings they’ve held rates steady. They did indicate in their economic projections that they expect to hike rates one more time this year.
I don’t get this idea of holding rates steady when you plan to hike again—probably at their next meeting in October. Inflation has come down sharply since the Fed began raising rates in March 2022, but it’s still well above their 2% target rate. So why did they think it’s a good idea to pause during June and September, when that will keep inflation high longer than necessary? Maybe they didn’t want to upset the stock market, which was looking for this pause after the latest jobs report showed a cooling labor market.
Inflation remains elevated because the economy is out-performing expectations, so it seems to me that the economy could better handle the hikes now rather than later when the economy might not be as strong. And remember, these hikes take at least 6-12 months to impact the economy, so putting them off can be troublesome.
Here are some other things the Fed said on Wednesday:
- They significantly raised their forecast for economic growth this year, from 1.0% to 2.1%.
- Their inflation forecast didn’t change much for this year and 2024.
- Rates will stay higher for longer than expected, as the Fed now predicts fewer rate cuts in 2024 than in their June projections.
The Best Time to Buy a Home This Year
I won’t keep you waiting any longer, it’s the week of October 1-7 according to Realtor.com. They say that inventory in the U.S. could rise as much as 17% during the first week of October, giving home buyers more options and potentially saving them over $15,000.
Keep in mind that all real estate is local, so the best week can vary by market. Realtor.com looked at the 50 largest metropolitan areas, and the best week varies from January 8-14 in the Miami metro area to December 3-9 in the Tampa-St Petersburg market. For those of you in the New York-Newark-Jersey City metro area it was Sept 10-16, so you missed it. Better luck next year.
Goodbye Eagles
Had the pleasure of seeing the Eagles at UBS Arena on Wednesday with my family, for what they’re calling "The Long Goodbye" tour. An amazing show that started with Steely Dan—another legendary American band—opening up, followed by a two-hour set of Eagles classics and some solo stuff. Am I the only one shocked that Joe Walsh can still hit the high notes in "In the City?" I loved it that my son had such a good time listening to both bands, as he’s more of a metal head who just made me take him to a Metallica concert for his birthday.
There’s no denying the greatness of the Eagles, just look at the setlist from the show. So many hits that had everybody singing along all night. No matter how many times I’ve seen them, it’s still hard to believe how well they play and how perfectly their voices fit together. It was sad leaving the arena after the show and thinking that was the last time I would hear Don Henley sing Hotel California. But you never know, many bands—most notably The Who—have had numerous farewell tours over the years. There’s been talk this tour may last into 2025, which could rival the length of Elton John’s "Farewell Yellow Brick Road" tour.
If it is truly the end, at least they are going out with a bang, but it is sad that so many of my favorite bands are calling it quits. I will be seeing Aerosmith’s "Peace Out" tour in January. Classic rock is dying out, and that’s a shame. My son frequently asks me, "What bands will I take my kids to?" My answer is always the same: tribute bands.
Leave a Reply