Inflation Slows & Rates Drop AGAIN; WHY SO IMPORTANT?
Rates plummeted yesterday after Fed Chair Jerome Powell made some comments indicating that the Fed will start to slow its rate increases.
Rumor has it that he got early notice of today’s delightfully tame inflation reports, and thus decided to back off on his “hawkish” efforts to keep pushing up rates.
10-YEAR TREASURY YIELDS FELL FROM 4.34% TO 3.55% TODAY
The 10-Year Treasury Yield is one of the most important interest markers in the world economy, as many other investment vehicles (such as mortgage rates) closely track or react to the 10-Year Yield.
AND – the 10-Year Yield has fallen about 8/10% since mid-October when it peaked at 4.34%.
When it did peak, many macro commentators and the financial press were in panic mode – predicting 8% mortgage rates.
And – what happened this week simply proves once again that they seem to truly have a pulse of what is going on in our economy.
They both have been harping on the weakening employment situation too – despite the contrary reports (“10 million job openings”) we are hearing in the financial press – indicating that the economy will get weaker and rates will drop further. Snider’s latest podcast, linked above, addresses this.
CONSUMERS THINK HIGHER RATES AND INFLATION WILL CRASH THE HOUSING MARKET!!!
41% of consumers think a housing crash is imminent, per this National Mortgage News article.
AND – the top two reasons consumers think the market will crash are: (1) high inflation; and (2) high interest rates.
AND THIS IS WHY TODAY’S NEWS IS SO IMPORTANT!
Today’s news and recent trends, with inflation slowing and rates dropping, strongly mitigate the top two reasons consumers think housing will crash.
A few weeks ago, I blogged about “The Biggest Problem In Real Estate Right Now” (Buyer Apprehension).
This blog and today’s news should help us all bring those nervous buyers back to the market.
I might finally add that today’s news also shows that Habib and Snider have been correct all along with their predictions, and they are both predicting much lower rates coming soon…
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