Do the Nominal Numbers Matter?

Housing is in free fall. Home builder sentiment has fallen at the fastest rate in the history of the series. Housing is only 3% of the economy, but does it have a great track record predicting where the economy goes? Yes. The Fed typically is a backward indicator of consensus expectations. None of those metrics suggest there's any forward or future inflation problem. As inflation falls and falls very quickly relative to what the baseline is in unemployment worsens, the Fed literally will pivot to the unemployment rate.