Checking in on the U.S. Housing Market

Happy Friday! The weekend is almost here, so you can rest easy if it’s been a stressful week. Unless, of course, you’re one of the Wordle aficionados stressed about maintaining your daily playing streaks. 

Quick Hits: Today’s Top Stories

  • Israeli Defense Minister Yoav Gallant said Thursday that the Israeli Defense Forces (IDF) had largely defeated Hamas in Khan Younis, a large city in southern Gaza where the IDF has been fighting Hamas for weeks. “Hamas’ Khan Younis Brigade boasted that it would stand against the IDF, now it’s falling apart,” Gallant told IDF forces in the city on Wednesday. “I am telling you here, we are completing the mission in Khan Younis.” 
  • The U.S. carried out strikes against the Iran-backed Houthi rebels early on Thursday, hitting a drone ground control station used to target ships in the Red Sea and Gulf of Aden. U.S. Central Command said 10 drones were also destroyed. The strikes came as U.S. forces intercepted anti-ship missiles, drones, and an unmanned explosive vessel threatening ships in the Gulf of Aden over the last two days. Meanwhile, Defense Secretary Lloyd Austin signaled that the U.S. response to the Iran-backed militia groups responsible for the attack that killed three U.S. soldiers in Jordan on Sunday would be more significant than previous retaliations. “We will have a multi-tier response,” he told reporters. “We have the ability to respond a number of times depending on the situation.” Initial plans for a response—including retaliatory strikes in Iraq or Syria—have been approved, according to CBS News.
  • The European Union (EU) agreed to a $54 billion aid package for Ukraine on Thursday after Hungarian Prime Minister Viktor Orbán blocked the deal for weeks. “This locks in steadfast, long-term, predictable funding for Ukraine,” said Charles Michel, the president of the European Council. The agreement provides Ukraine with aid—disbursed as loans and grants—for the next four years with an option to review the necessity of continuing aid in two years. Across the Atlantic, a decision about renewed U.S. aid to Ukraine could come soon as Senate Majority Leader Chuck Schumer said that votes on an immigration-Ukraine aid deal would come next week—and that details of the agreement would be made public by the end of this weekend.
  • President Joe Biden signed an executive order on Thursday authorizing the secretaries of the State and Treasury departments to sanction foreign nationals—largely Israeli settlers—who attack and intimidate Palestinian civilians to leave their homes in the West Bank. “The situation in the West Bank—in particular high levels of extremist settler violence, forced displacement of people and villages, and property destruction—has reached intolerable levels,” Biden said in the order. The State Department announced Thursday that it had levied financial sanctions on four Israeli settlers under the new executive order. 
  • The State Department approved the sale of almost $4 billion in drones to India on Thursday. The approval allows for the potential sale of up to 31 weaponized MQ-9B SkyGuardian drones along with accompanying Hellfire missiles and laser-guided bombs—India’s current fleet of drones only has reconnaissance capabilities. The purchase would be part of the country’s decade-long, $250 billion military upgrade. 

Paying Down the House

(via Getty Images)

Americans generally haven’t felt good about the economy since the COVID-19 pandemic began nearly four years ago. After enduring months of shutdowns and a spate of shuttering businesses, consumers then had to grapple with decades-high inflation. Now, as inflation cools, the winds of consumer confidence may be changing, with sentiments rebounding slightly since November. 

But the U.S. housing market may continue to be thorn in the economy’s side in 2024, as still-high mortgage rates and home prices drive a supply shortage.

The Federal Reserve’s decision on interest rates earlier this week may help—it’s holding the federal funds rate steady between 5.25 and 5.5 percent—but Federal Reserve Chair Jerome Powell suggested no one should hold their breath waiting for future cuts (though, we will continue monitoring the color of his tie for any tells). Powell and members of the Federal Open Markets Committee are awaiting “greater confidence that inflation is moving sustainably toward 2 percent,” as they put it in their statement. That caution has led markets not to expect a rate cut at the Fed’s next meeting in March, but they’ve begun pricing in lower rates for later this year.

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