Macro Briefing - Thursday, Feb. 27

By James Picerno of Capital Spectator

Thursday, February 27, 2025 1:31 PM EDT

New US home sales fell sharply in January. “New home sales will continue to struggle with fewer homes coming to market due to tepid buying activity,” says CoreLogic chief economist Selma Hepp. “Even though homebuilders continue to offer buyer incentives, high mortgage rates, mixed with continued price appreciation, keep the eligible pool of homebuyers restricted to higher income individuals.”

Trump said he’ll impose 25% tariffs on imports from the European Union. “We’ll be announcing it very soon,” he told reporters on Wednesday. “It’ll be [a] 25% [tariff] generally speaking, and that will be on cars and all other things.”

Forecasts for the January Personal Consumption Expenditures Price Index report, scheduled for release on Friday, point to overall inflation remaining higher than the Federal Reserve prefers. The annual rate of core PCE inflation is expected to drop from 2.8% in December to 2.6% in January, but holding above the central bank’s 2% inflation target.

Richmond Fed President says US economy may face “inflationary headwinds.” Kent Engelke, chief economic strategist and managing director at Capitol Securities Management, agrees, predicting: “I do believe inflationary pressures are increasing.”

Warren Buffett’s Berkshire Hathaway has sold its holdings in S&P 500 ETFs, eliminating the firm’s ETF investments. According to disclosure filings for the fourth quarter, Berkshire’s shares in the SPDR S&P 500 ETF Trust (SPY) and Vanguard S&P 500 ETF (VOO), each valued at roughly $22mn, were liquidated.

US 10-year Treasury yield falls for sixth day, dropping to 4.26%–lowest since mid-December:

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