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US Housing Sector Data Signals Softer Demand Outlook
On March 18, US housing data influenced sentiment toward the US economy, presenting mixed signals.
Housing Starts surged 11.2% month-on-month (MoM) in February after tumbling 11.5% in January. Meanwhile, building permits dipped by 1.2% after falling 0.6% in January. While housing starts signaled a short-term boost in demand, falling building permits suggest a weaker long-term outlook. A cooling housing market could weigh on consumer confidence, spending, and GDP growth.
Tuesday’s data coincided with shifting sentiment toward the US economic outlook. Brian Tycangco, editor/analyst at Stansberry Research, commented on the gloomy results of a CNBC Fed Survey, saying:
“Markets hate bad news.”
According to the CNBC Fed Survey,
- The probability of a US recession increased from 23% in January to 36%.
- Average GDP growth forecasts fell from 2.4% to 1.7%.
- Analysts, fund managers, and strategists cited tariffs as the key threat to the US economy.
- 77% of respondents expect two or more Fed rate cuts in 2025.
Asian Market Implications: While Fed rate cut expectations supported risk appetite, lingering uncertainty about the US economy limited gains for risk assets early in the Asian session on Wednesday, March 19.
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