I’ve been out participating in various youth camps for the last three weeks; we had some marvelous experiences, but it’s nice to be back in the office again.  Here the water is already filtered, there are fewer bugs, and it’s always 72 degrees. I also did a bike race last Saturday, which was harder to do after returning from a 40 mile backpacking trip the night before.  Enough about me.

We have a bit of disinflationary news out today.  The Retail Sales number shows that spending dropped -0.9% from last month.  And despite the broadened outreach of tariffs on imported goods, domestic Industrial Production is also down -0.2% from 30 days ago. Lastly, household rents and imputed rents (the monthly expense for someone owning their own home) have dropped -1.7% over the last 12 months.

Historically, housing costs costs have contributed 25% to the Personal Consumption Expenditures Index. Due to rising costs, housing now accounts for almost 33% of PCE.  This is a big deal for the Fed, who begins their two day FOMC meeting today.  We expect no change to their monetary policy at the conclusion of the meetings tomorrow.