“Up and down, without much change,” sums up the market performance for this week.  While not atypical for summer months in terms of its overall stagnancy, the market shows distinct signs of confusion in the wake of Ben Bernanke’s failure to hint at the direction of further interest rate adjustments in his most recent speech and the upward trend in crude prices on speculation over pending summer storms. Perhaps the annual retreat of the world’s central bankers to Jackson Hole this weekend will result in state-side monetary policy clarification though analysts are cynical.

Allen Sinai, chief global economist and president of Decision Economics, said whatever comments might emanate from Fed officials over the weekend, they are likely to stick to a “script” they have already laid out. “I think the members by and large in casual conversations, to the extent they have them, will stick to the script and the script is the consensus view of the economy and inflation, which is a transition to a moderate pace of growth and, very slowly, a winding down of inflation,” he said.

A not so quiet buzz continues over the real estate market.  When the impact will be felt and of what order is speculative but that there is a building “storm” with market-shaking potential is a seeming certainty.  One interesting article from last year attempted to show how the lion’s share of US GDP was driven by the housing boom and cheap credit following the dot com bust. Taking a defensive posture, John Fisher and Saad Quayyum, economists at the Chicago Fed have penned a new Fed study.  “The housing boom has not been driven by unusually loose monetary policy,” they conclude, attributing the boom to increased productivity.