Whether Operation Twist will push rates any lower, and whether marginally lower rates matter for the economic outlook, are questions for debate. In fact, the Fed's latest action is unlikely to offset any of the economy's most serious headwinds.

The positive impact of the proposed American Jobs Act is overstated by its proponents. In the near term, the proposal could have a negative effect on hiring trends. Given the potential for Congressional gridlock, some firms will postpone plans for payroll expansion until the time frame and exact provisions of new measures become clear.

In the context of a fragile economic recovery, questions about the impact of the hurricane on activity are prudent and necessary. The immediate impact of the hurricane will be a decline in economic activity. In the short and medium term, however, activity may rebound as capital and labor resources are deployed in rebuilding.

Updated assessments of the economic outlook have been colored by the last week's wild swings in the stock market. If Washington makes an about face and works to support an environment conducive to private investment, conditions could change for the better.

Investors are increasingly concerned about the potential for a relapse into global recession, internalizing weak US economic data that was overlooked in the days and weeks preceding the resolution of the debt impasse.

As fundamentals pull further away from underlying job growth, it becomes increasingly important for market participants to keep tabs on the latter. With July’s jobs report less than two weeks away, the reliability of alternative metrics deserves some attention.

The Bureau of Labor Statistics' report of June employment offers few silver linings for the commercial real estate industry. While the outlook is restrained, the resolution of policy uncertainties has the potential to stimulate a return to more stable job growth.

The default rate on banks' CRE mortgages has come off its 2010 peak. More than 40% of institutions now have CRE default rates of 1% or less. At the other extreme, 75 banks with a total of $12.8B in CRE loans have default rates exceeding 20% as of Q1'11.