The Federal Open Market Committee starting up today.  It will be the last for current Vice-Chair Stanley Fischer.  He was a former economist at World Bank, and noted teacher at MIT, with illustrious pupils such as former Fed Chair Ben Bernanke and European Central Bank President Mario Draghi.  Mr. Fischer has been a bit of an inflation hawk, warning of the risks of a prolonged low-rate environment.  His vacancy opens up a fourth empty seat at the Fed for President Trump to fill.

Speaking of President Trump, he welcomes Heads of State from across the globe to New York City this week for the United Nations General Assembly.  It will be a great opportunity to be Presidential and unite voices to promulgate peaceful understanding.  Germany, North Korea, and Russia are all absent from the event.

Newly constructed homes represent about 10% of the housing market across the country. This morning’s reading shows a 0.8% drop in Housing Starts, but number of new Building Permits requested rose 5.7% last month.   

The markets close early today, and will be closed tomorrow in honor of Good Friday.  Traders tend to hedge going into three day weekends, so there could be a little selloff today.  On top of that, you can see from the above graph that the pricing for mortgage funds is again at YTD highs and ripe for a correction.  To the contrary, and keeping us pegged at the current ceiling, are a couple of things:

1. Talking monetary policy last night, President Trump said that he favors low interest rates, thinks that the dollar is too strong, and is undecided on whether or not he will swap out the current Fed Chair when her term renews next year.

2. The Producer Price Index released this morning showed that the cost of making new stuff declined -0.1% last month.

3. Initial Jobless Claims are at low levels not seen in 40 years, when the population was not as numerous

In honor on Valentine’s Day and the love that our illustrious leader has in his heart for business, President Trump announced that he will make an announcement on a “phenomenal” (his word) corporate tax cut within the next three weeks.  Lower taxes of course mean greater earnings for corporate America, and investors are beside themselves with amour, driving the price of stocks up to fresh collective highs. That puts upward pressure on interest rates, which seek to compete for the same investment dollars from would-be suitors. 

Leading the Charge

No news out today.  The DOW just hit a new all-time-high at 19,258 and money is coming out of bonds to fuel that fire.  A few Fed Governors are out speaking today ahead of the next FOMC meeting next week.  William Dudley said this morning that he favors gradual rate hikes, which will increase more quickly under the Trump Administration.  This is how I see that he sees the next president.