Tomorrow morning we’ll see if Trump said enough about the subjects near and dear to Wall Street’s heart–less regulation of the financial sector and lower corporate taxes–to keep the post-Trump-victory rally going. But the real important reaction, the one that I’ll be watching most closely will come from the Federal Reserve
If the Trump administration is going to get the economy growing at something better than the 1.6% growth in GDP recorded in 2016, it’s going to need businesses to invest in new plants and new equipment–the stuff needed to make more stuff. Which is why the January report on durable goods order released today by the Department of Commerce is a little worrying.
Sales of new homes climbed in January from December’s disappointment–climbing 3.7% to a 555,000 annualized rate–but still fell short, modestly, of forecasts. Economists surveyed by Bloomberg were looking for an annualized rate of 571,000. I don’t think there’s anything in these numbers to cause a revision in thinking about interest rates at the Federal Reserve.