The Week in Review: April 30, 2016

by Mises Institute

Surprising no one, the FOMC announced this week that they would maintain the status quo on the federal funds rate. Meanwhile housing prices are outpacing household wages, with Ryan McMaken noting that the Fed’s suppression of interest rates has led to consumers replacing “saving with consumer debt (i.e., mortgages) and a hope that people can continue to make the high payments every month. It’s not a terribly wise long-term economic strategy, but it’s one the Fed is banking on.” Meanwhile C. Jay Engel highlights a few more troubling indicators, including a decline in durable goods orders, the Atlanta Fed being forced to lower GDP estimates, and the “the difference between pro forma and GAAP corporate earnings numbers are at the highest since the previous financial crisis.”

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