While Everyone Is Watching the Fed, the Economy Slips
The U.S. economic data isn't hanging together in a nice neat package.
Markets this week were almost consumed with watching the U.S. Federal Reserve, selling off before the meeting, and rallying after the Wednesday announcement and press conference where the Fed took a slightly dovish tone. The Fed even managed to push the Greek circus out of the headlines, at least for a day or two. Most markets were little changed for the week, including the bond market after this week's up-and-down, Fed-induced fake-out.
While everyone was busy watching or anticipating Fed action, the U.S. economy took a quiet turn for the worse. Housing starts were down and permits, adjusting out data from the Northeast, were basically unchanged. We had been hoping like crazy that the housing market would step up to aid slumping export and manufacturing sectors. So while a little better, the improvement just isn't enough to move the economic needle.