(The Center Square) – This week’s economic calendar is packed with major reports and Fed speeches, but January’s messy data – driven by historic wildfires, an unprecedented winter freeze, and unusual snowfall – may do little to clear the fog over the U.S. economy. Here’s what to watch:
S&P Case-Shiller Home Price Index (Dec.)
• November’s national home price index rose 3.8% year over year – up slightly from 3.6% in October – but rising December mortgage rates likely held back buyers. Zillow reports indicate that homes for sale are up 18% versus early 2024, suggesting easing price growth as more sellers return.
Consumer Confidence (Feb.)
• Expected to decline further amid rising policy uncertainty and renewed inflation fears.
New Home Sales (Jan.)
• Forecast at 674,000, down from 698,000, new home sales were more likely affected by the January freeze than by mortgage rates, which have eased since mid-month.
• With higher inventory and softer rates, a rebound may be on the horizon if no new policy shocks emerge.
Inflation measured by the PCE & Core PCE (Jan.)
• The upcoming PCE report will be critical: headline inflation has rebounded, driven by higher energy and food prices, while core inflation remains steady at 2.8%.
Bottom Line:
While economic growth remains robust, it is expected to slow amid escalating policy uncertainty. Uncertainty – stemming from tariff fears or potential regulatory and fiscal policy changes – acts as a negative supply shock, raising prices and curbing growth simultaneously. The Fed, therefore, is caught between slowing growth and persistent inflation pressures, leaving it on hold for now.
This article was originally published at www.thecentersquare.com
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