This past Sunday the party in Greece that wants to stay in the Union won the election, but not by much and now Greece has to form a new Parliament that based on the election may not be easy. The reaction on Sunday to the vote was rather subdued, the US bond market improves a little with US stock indexes slightly weaker. This week there are a number of housing reports but not much data on the wider economy; the one exception is the key Philadelphia Fed business index on Thursday. May housing starts and permits on Tuesday, May existing home sales on Thursday. In the meantime Monday gets the NAHB housing mkt. index.
The main event this week is the FOMC meeting on Tuesday and Wednesday; there has been an increasing idea the Fed will launch another QE when the policy statement is released on Wednesday afternoon. What advantage will another easing move have on the economy, the question that will be debated early this week. If the Fed does an easing kind of move the likelihood is it will simply extend Operation Twist that is scheduled to expire at the end of this month and accomplish very little. Any Fed so-called easing won’t improve the jobs front, won’t increase home sales, or won’t improve the present pessimistic attitude held by most medium and small businesses where most of the jobs come from.
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