Oh yeah, there is a Fed meeting today

Oh yeah, there is a Federal Reserve meeting today as I almost forgot with Trump 47 and the now DeepSeek news dominating the headlines. The statement seen at 2pm will be a non-event but I'm most interested in two things when it comes to the Powell press conference. Will Powell echo what Governor Chris Waller said a few weeks ago on CNBC when he said "As long as the data comes in good on inflation or continues on that path, then I can certainly see rate cuts happening sooner than maybe the markets are pricing in." Or was Waller just politicking for Powell's job when it frees up in May 2026 in being dovish and getting in the good graces of Trump who said he wants interest rates lower, immediately? Or will Powell, as I think he should, just be non-committal on rates from here, especially as headline GDP (goosed by both government spending and government incentives via infrastructure, IRA and Chips Act) continues to be around 2.5% and as we await what the tax/tariff policy will be from the new administration.

Also, will there be any questions and Powell comments on the Fed's balance sheet. Most expect QT to end this year but when and at what targeted level?

On inflation, the rental growth moderation should continue to filter thru the services component but with still many of the unknowns, I just don't see how Powell has any confidence on how things ultimately play out to commit to anything today. As for rents, Apartment List on Monday said that NEW rents fell .2% in January m/o/m in the seasonally slow rental period. They are down .5% y/o/y. The vacancy rate rose one tenth to 6.9% which is the highest dating back to 2017 when they first started collecting this data point. We know all about the big supply that came on line last year with almost all of it in the sunbelt with Austin, Texas leading the way on the price declines.

Apartment List also said this though, "Year-over-year growth has now been negative since June 2023, but in recent months, there are signs that we could see a return to positive growth this year...With the supply wave now getting past its peak, it appears that the era of declining rents could be nearing its end."

This is something I've been arguing about. We have to enjoy this rental deceleration while it lasts because it won't. With the huge affordability challenge in buying a new home for a first time buyer, rental demand will continue to be solid and as we digest the large amount of new supply, and as there will be very little new supply in the coming few years, rental prices will reaccelerate I believe in the back half of this year, into 2026.

To the many earnings calls.