DoubleLine’s Jeff Mayberry and Samuel Lau try to pin down when this brutal summer will actually end – they go with Sept. 22 – before jumping into their coverage of the Aug. 23-27 market week. Jeff and Sam note that the markets seemed to like what Federal Reserve Chair Jerome H. Powell said about tapering asset purchases and how he said it in the major macro event of the week. Sam rates the first 15 minutes of Powell’s 20-minute policy symposium speech a snoozefest with reiterations of previous topics and stances (starts at 10:44). But the highlight of the event was Powell’s reveal that he is among the Fed members who could see tapering beginning before year’s end. Jeff and Sam discuss the differences between this announcement and the lead-up to 2013’s Taper Tantrum, pointing out that listeners to the MMM podcast shouldn’t have been surprised. For the Question of the Week (18:35), they look at the work of another duo, the Sam-friendly short paper “Surging House Prices Expected to Propel Rent Increases, Push Up Inflation” by Xiaoqing Zhou and Jim Dolmas, senior economists at the Federal Reserve Bank of Dallas*. Jeff and Sam discuss the findings, including the weighting of owners’ equivalent rent in the Consumer Price Index and the comparable metric in the Personal Consumer Expenditures Index**. Looking ahead, next week’s deliveries will include reports on housing prices and job numbers. This episode was recorded before market closing on Aug. 27, 2021.
* The paper can be found here: https://www.dallasfed.org/research/economics/2021/0824
** Jeff and Sam discussed these metrics in detail in the Episode 13 QoW (April 26-30): https://doubleline.com/podcast/monday-morning-minutes-recap-of-the-april-26-30-market-week/
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