Posted by Leonard Steinberg on August 7th, 2013

I had a very interesting dinner with two top bankers who truly ‘get it’. When I asked them what they saw happening economy-wise over the next 6 – 12 months, they told me about the five critical events that could help answer this question:  Over the course of the next few weeks, FIVE critical events will take place that may provide the key to seeing the future of our economy (and the real estate market):

1) August 21st: The Federal Reserve Open Market Committee meeting minutes will provide an economic analysis and possible policy changes. The minutes of the previous meeting (which happens 8 times per year) are reported 3 weeks after the actual meeting.

2) Jackson Hole: This annual event draws top central bankers from around the world for a monetary policy symposium. Whomever is selected to be the key speaker could provide insight into whom will be the next Federal Reserve chairman to replace Bernanke. Yellen would be good for the economy,….

3)  September 6th: Nonfarm payrolls: this is a great indicator about the health of the employment market as well as the overall momentum of the economy. The total nonfarm payroll accounts for approximately 80% of the workers who produce the entire gross domestic product of the United States. it excludes government, private household, farm and non profit employees that provide assistance to individuals. What is important last jobs number prior to the Fed meeting. It is the last picture of the employment market prior to the September meeting.

4)   September Fed meeting: This meeting could provide good insight to the Fed’s policy regarding tapering of the quantitative easing program. Tightening easing would signal an improving economy. Maintaining the current status quo could mean the economy is not doing well enough to change the level of the quantitative easing was still considered necessary to prop up the economy.

5) The debt ceiling:  As it stands today the Federal government budget will run out of money by mid to late October, 2013….expect Congress to start bantering over this subject in an attempt to formulate solutions: Don’t expect it to be as dramatic as last 2011’s showdown. I hope our government has learned its lesson.

I will return to this crystal ball question in a few weeks to see how we fared: My suspicion is that the above, combined with a mayoral election, could place the real estate markets in a bit of a hold pattern for the next few months…. no market likes the unknown. After that I suspect it will emerge that the US economy is quite strong and we could see a very solid 2014 ahead of us.