US equity markets, as measured by the S&P 500 index, were down slightly last week. On Wednesday, Federal Reserve Chair, Jerome Powell, announced that it intends to keep interest rates near zero through at least 2023, confirming its very accommodative stance toward monetary policy will be in place for significantly longer. The Fed also said in its meeting minutes that it does not expect inflation to consistently meet the 2% target until 2023, potentially an implication that the group does not expect a robust economic recovery in the near future.
The Commerce Department announced Thursday that housing starts fell 5.1% in August to a seasonally adjusted annual rate of 1.42 million. The pause comes after three months of increases in housing, and the rate is meaningfully higher than August 2019. Looking forward, single family permits for new homes increased 6% to an annual rate of 1.04 million. Like housing, the labor market continues to improve, albeit at a slowing pace. Last week, another 860,000 people filed initial claims for unemployment insurance benefits, and continuing claims for benefits remain elevated at 12.63 million people, down approximately 900,000 from the previous week. The economic calendar is relatively light this week, potentially one of the last quiet periods for markets as Q3 earnings season will soon begin as well as the run up to the 2020 Presidential election.
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