Fed Expected to Hike Rates 25 Basis Points as Lennar and Wayfair Face Key Week

MacroEarningsAnalyst Impact 4

โดย Zacks Investment Research·

Summary · why it matters

Futures traders are pricing roughly a 93% probability that the Federal Open Market Committee will raise the federal funds rate by 25 basis points to a target range of 3.75% to 4.00% at its Wednesday meeting, which would be the first rate hike since July 2023. The repricing has been rapid, moving from 48% a month ago to 59% a week ago and 93% today, after two inflation reports showed prices moving away from the Fed's 2% target, with PCE running at 3.7% over twelve months and 4.1% annualized over six. Chair Kevin Warsh has called the inflation figures concerning, and Barclays now expects two more hikes this year, in September and December. The decision carries an unprecedented wrinkle: the FOMC has never outvoted a sitting chair on a monetary policy decision, and Warsh was appointed by a president who has been vocal about wanting lower rates. Lennar reports fiscal third-quarter results Wednesday after the close, with management guiding to earnings of $1.20 to $1.40 per share on 20,500 to 21,500 deliveries, an average sales price of $375,000 to $380,000, and gross margin near 16%, while Wayfair carries a Zacks Rank #1 and sits at the intersection of Wednesday's retail sales print and Thursday's housing data.

Lennar Corporation ▼

Wayfair Inc ±

Impact on stocks 6

Consumer Discretionary▼ · 2 stocks

Lennar Corporation

LEN

▼ NegativeMonetaryrelevance

Lennar reports Q3 results in a week dominated by an expected Fed rate hike to 3.75%-4.00%, which pressures housing demand and mortgage rates.

Wayfair Inc

± MixedMonetaryrelevance

Wayfair sits at the intersection of Wednesday's retail sales print and Thursday's housing data amid an expected Fed rate hike, with no company-specific development stated.

Financials▲ · 1 stocks