Short term rates and Tax reform

The Fed’s communications and decisions last week were largely as expected.  They announced no change in short term rates and confirmed that it will begin shrinking their balance sheet in October.  The market was expecting this, and we believe the focus will now turn to progress on tax reform in Washington until a new earnings season kicks off in early October.

What we’re reading:

The history of Sears predicts nearly everything Amazon is doing (The Atlantic)

Here’s what is new in Republican’s latest effort to overhaul healthcare bill (CNBC)

Microsoft finally starts doing something with LinkedIn (Tech Crunch)

Dudley sees Fed rate hikes; inflation weakness fading (Reuters)

Economic Calendar:

Week in review:

  • Housing starts rose to 1.18m
  • Existing home sales down to 5.35m
  • Jobless claims fell to 259k
  • Fed held rates unchanged at 1%-1.25%

Week ahead:

  • New home sales
  • Final Real GDP estimate
  • Jobless claims

• Personal consumption

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