In what could either be taken as a good sign for the economy, or an omen of a big fall to come, new research is out which shows that Americans are spending record amounts on home improvements. Home inventory is very weak right now, which means many buyers seem to be sticking in their current homes rather than trying to buy. This seems to have led to a surge in home improvement investment. According to Harvard, Americans are forecast to spend a whopping $316 bn on home improvements this year alone. Economists say the splurge is a sign of broken housing market, with low inventory and no new construction.
FINSUM: To us this may be more of a sign of restraint and good lending practices than it is a frothy economy or a broken housing market.
Gary Cohn, former Goldman Sachs executive and top economic adviser to president Trump, is leading the search for a new Fed chief to replace Janet Yellen. But guess what, he seems the most likely to fill the role. Putting oneself forward in a search role is not foreign in Washington—that is how Dick Cheney got his position as vice president under George W Bush. Speculation about the next Fed boss has grown as Yellen has not made her intentions clear and Trump has long been an opponent of her tenure. If Cohn were to take her place he would be the first Fed leader in decades that did not have an extensive economics background.
FINSUM: We think this would be a perfect fit for Cohn. Given the turmoil at the White House and the fact that he seems to be at odds with Trump on some issues, it might be a very good role for him to be the leader of the Fed.
The Republican push for a healthcare overhaul to replace Obamacare has not been doing very well. Senate leader McConnell has delayed the summer recess to try to get it through, but so far it looks like Republicans just don’t have enough votes. As a response, the party is set to unveil a new plan that will hopefully attract more lawmakers to support it. However, early comments on the new plan (which is due out today), don’t seem favorable.
FINSUM: The big trouble for McConnell, who is publicly under pressure from Trump, is that some of the non-supporting Republicans think the measure goes too far, while others think it does not go far enough. Hard to make a deal in that situation.