Roach on China and the Road Forward

The Inside Economics team dissects yet another upside surprise in the February jobs report and ponders the mixed messages between the payroll and household surveys. Employment is coming in hot but the unemployment rate rose to its highest level in over a year and wage growth cooled. The team theorizes on why the two surveys are so at odds with each other lately. Finally, they each opine on whether the data are leaning more toward a higher risk of recession or “no landing”. Surprisingly, they’re all in agreement.

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Amid all the optimism regarding a soft landing for the economy, the Inside Economics team considers what bothers them most about the economy’s near-term prospects. Cris focuses on GDP vs GDI, Marisa on the soft global economy, and Mark on the internals of the labor market. They remain upbeat about the economy, but….

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Inside Economics welcomes back Mark Calabria, the former director of the Federal Housing Finance Agency. We discuss the current housing affordability crisis and what policymakers should do to address it, the FHFA’s response to the COVID-19 pandemic, and the risks posed by nonbank mortgage companies. The group also takes up the role of the Federal Home Loan Banks. Plenty of debate, and even some agreement.

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Mark, Marisa, and Cris take a deep dive into current housing market trends.  They consider the demand and supply drivers that are depressing existing home sales and pushing homebuyers towards new construction.  Along the way, the team deconstructs mortgage rates and provides its best estimate of the nation's housing deficit.  Mark challenges Marisa and Cris to come up with solutions to the housing crisis and wonders if we'll ever experience another sharp increase in foreclosures.

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The Inside Economics team is joined by CPI guru and colleague Matt Colyar to discuss the bevy of inflation-related data released this week. First the team dissects the Federal Reserve’s CCAR stress test scenarios and laments the perpetually inconvenient timing of their release. Talk turns to the root causes for the inflation of the past few years and why shelter inflation is so stubborn. The team imagines themselves on the FOMC for a day and what they would do with interest rates going forward.

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Bill Adams, Chief Economist of Dallas-based Comerica bank, joins the Inside Economics team to assess the economic outlook and consider a range of economic issues from consumer credit to China’s prospects. We also learned what he is most anxious about, and it isn’t the outcome of the Super Bowl.

For more info on Bill Adams click here

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Dante joins the podcast to break down the January employment report. Fitting for Groundhog’s Day, the jobs report delivered an eerily similar upside surprise to what we saw in January 2023. Following the January meeting of the FOMC this week, the team discusses what the Fed is likely to do in light of recent data.

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The Inside Economics team revels in the great economic numbers of the past week. The economy not only avoided a recession in 2023, but it ended the year enjoying robust GDP growth and tame inflation. But there are threats at the start of the new year, including a potential seizing up of the all-important Treasury bond market. Samim Ghamami of the SEC joins the podcast to discuss this threat, its causes and implications, and potential reforms to ensure it doesn’t upend financial markets and the economy.

Today’s guest Samim Ghamami is currently an economist at the U.S. Securities and Exchange Commission, where he works with the SEC senior management on the reform of the US Treasury market and several other capital market initiatives. Ghamami is also a senior researcher and an adjunct professor of finance at New York University, a senior researcher at UC Berkeley Center for Risk Management Research and the Department of Economics, and a senior advisor at SOFR Academy. 

Ghamami has been a senior economist and a senior vice president at Goldman Sachs. He has been an adjunct associate professor of economics at Columbia University. Ghamami has also been an associate director and a senior economist at the U.S. Department of the Treasury, Office of Financial Research, and an economist at the Board of Governors of the Federal Reserve System.

Ghamami’s work has broadly focused on the interplay of finance and macroeconomics, and on financial economics and quantitative finance. His work on banking, asset management, risk management, economic policy, financial stability, financial regulation, and central clearing has been presented and discussed at central banks. He has been an advisor to the Bank for International Settlements and worked as an expert with the Financial Stability Board on post-financial crisis reforms in 2016 and 2017. Ghamami also served on the National Science Foundation panel on Financial Mathematics in 2017 and 2018. Ghamami received his Ph.D. in Mathematical Finance and Operations Research from USC in 2009. His publications have appeared in different journals including Management Science, Journal of Applied Probability, Mathematics of Operations Research, Journal of Financial Intermediation, Journal of Credit Risk, Journal of Derivatives, Quantitative Finance, and Journal of Risk.

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Robert Dietz, Chief Economist of the National Association of Home Builders, joins Mark Zandi, Marisa DiNatale, and Cristian deRitis to discuss the outlook for mortgage rates, home sales, and construction activity.  The team delves into the immigration and demographic trends affecting housing demand along with the 5 L's (Laws, Labor, Land, Lending, and Lumber) limiting homebuilding today.  Rob's quoting of Tolstoy catches everyone off guard while the wide-ranging discussion made it difficult for the team to come up with a clever podcast title so we took a cue from Friends.

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In this wide-ranging podcast, we tackle the CPI inflation report, the mounting threat posed by cyberattacks on the financial system and broader economy, and the regulatory response. Jill Cetina and Lesley Ritter of Moody’s Investor Service and Joe Lyons of BitSight join us with their insights. And we finally learn how to pronounce Matt’s last name.

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