U.S. New-Home Sales Surge 12.4% in July

The video discusses the unexpected rise in new home sales, which increased by 12.4% instead of the anticipated 2% decline. The volatility of new home sales is highlighted, and the importance of maintaining this growth is emphasized. The discussion shifts to the US economy, which is underperforming expectations, and the Fed's monetary policy. The Fed's cautious approach to raising interest rates is explained, with a focus on the shadow Fed funds rate and its implications for future rate hikes.

What was the unexpected change in new home sales that occurred?

• A decline of 2%

• An increase of 12.4%

• A decline of 12.4%

• No change

What is a key factor that typically affects home sales?

• Retail sales

• Weather conditions

• Stock market trends

• Political events

What is the Fed's approach to raising interest rates according to the discussion?

• Aggressive and frequent

• Cautious and gradual

• Non-existent

• Immediate and large-scale

What does the shadow Fed funds rate indicate about monetary policy?

• It is irrelevant to the Fed's decisions

• It has no impact on monetary policy

• It is less accommodative than expected

• It is more accommodative than expected

What is the Fed's goal regarding the Fed funds rate?

• To decrease it below zero

• To increase it rapidly

• To align it with the short-run equilibrium rate

• To keep it at zero indefinitely