Weekly economic and financial commentary

Summary

United States: Back-up in Mortgage Rates a Setback for Housing

• The residential sector was in focus this week. The late summer dip in mortgage rates led to an upside surprise in existing home sales. Recent hurricanes weighed on housing starts in October. An upturn in the NAHB HMI shows builders are not put off by the rebound in financing costs and generally are encouraged by the election results.

• Next week: Durable Goods (Wed.), Personal Income & Spending (Wed.)

International: European Sentiment Slumps While Global Inflation Pressures Linger

• Sentiment surveys worsened in both the Eurozone and United Kingdom in November, supporting the view that the 2025 growth prospects for Europe could be more challenging in the wake of the U.S. presidential election. Against that backdrop we expect continued monetary easing from foreign central banks next year, though this week's price and wage data from the U.K., Canada and the Eurozone suggest a steady rather than accelerated pace of rate cuts.

• Next week: RBNZ Policy Rate (Wed.), Eurozone CPI (Fri.), Canada GDP (Fri.)

Interest Rate Watch: How Much Will the Fed Cut Rates?

• Strong economic data, recent comments by Fed officials and the potential of higher inflation in 2025 due to tariff increases have led market participants to dial back their expectations of Fed rate cuts in coming months.

Topic of the Week: Aye, There's the (Turkey) Rub

• Price growth at grocery stores has eased considerably since spiking at over 13% in the summer of 2022. Thanksgiving of that year, many families faced inflation for Turkey Day staples well into double digits with the price for the star of the meal—the turkey—up 16.9% from a year prior. Still, even amid dramatic declines in the rate of price growth, it is difficult to imagine swaths of Americans declaring “This year, I’m grateful for food disinflation” around their tables next Thursday.

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