Fed Chair Sweepstakes & Housing Resilience
Markets are closely watching developments surrounding the next Federal Reserve Chair. Over the weekend, President Trump referred to BlackRock’s Rick Rieder as “very impressive,” a comment widely viewed as a test of market reaction.
- The Odds: Rieder’s implied chances jumped to 33%. Kevin Warsh remains the frontrunner at 45%, though his odds have slipped roughly 14 points this week.
- Timeline: Treasury Secretary Bessent expects a decision as early as next week. A potential announcement before Wednesday’s Fed meeting would likely preempt Chair Powell’s commentary.
Housing Market: NAR Confidence Index (December)
Despite concerns about affordability and higher rates, Realtors remain optimistic that the first quarter of 2026 will outperform last year. While Days on Market increased to 39 days from 35, this appears largely driven by seasonal factors such as holiday timing and weather.
Key Housing Metrics
- Competition: 16% of homes sold above list price, with an average of 2.2 offers per property.
- Market Strength: 19% of buyers waived appraisals, while 18% waived inspections.
- Stability: Contract cancellations held steady at 5%, unchanged from last year.
- Buyer Mix: Cash buyers accounted for 28% of transactions, and investors made up 18%. First-time buyers dipped slightly to 29% but remain within historical norms.
The Week Ahead
- Monday: Durable Goods Orders
- Tuesday: ADP Employment Report, Case-Shiller & FHFA Home Price Appreciation
- Wednesday: Mortgage Applications, Fed Statement & Press Conference
- Thursday: Initial Jobless Claims, Productivity
- Friday: Producer Price Index (PPI)
Technical Analysis & Strategy
- Mortgage Bonds: Currently testing support at the 25-day Moving Average. Holding this level keeps the door open for gains; failure would shift focus to the 50-day average.
- 10-Year Treasury: Attempting to break below the 200-day Moving Average but has not yet succeeded. Yields remain range-bound for now.
Bottom Line: Leadership uncertainty at the Fed is adding intrigue, while housing fundamentals continue to show resilience. Markets remain data-dependent as we head into a critical week for rates and sentiment.
