Tag Archive for: federal reserve

Panic & Mayhem Over Interest Rates Shooting Up! Who’s Terrified The Most?

Slippery up and sticky down! Elevator up and escalator down! Those are the cliches we often hear about interest rates, and we’ve seen them play out in spades in recent weeks. Investors panic on every hot inflation or economic report that might prevent the Fed from lowering rates, or worse – cause the Fed to increase rates. This is partially because investors don’t want to lose money by being wrongly positioned (like Silicon Valley Bank was when it held too many low-rate bonds and went belly up), but it is more because our entire economy is addicted to “low-rate-monetary-heroin” (to quote George Gammon). So, rates are always prone to shoot up very quickly, but they tend to come down very slowly – as there is less at stake for investors when rates are trending downward.Read More

Fed Holds & Rates Fall: How Jobless Claims, Productivity & BLS Reports Impact Mortgage Rates; Inflation’s Over

Rates fell again this morning in response to negative labor market news and positive productivity news. Initial and continuous jobless claims came in higher than expected today along with more layoff announcements from the likes of UPS (12,000), Salesforce (7,000), and Microsoft (3,000). Bond investors are of course very leery of all these numbers, as they understand that layoffs are always the final shoe to drop once we’re in a recession and this this could just be the beginning. Labor market productivity improved too – and that is huge! Productivity refers to the total amount of output relative to total hours worked – and it is something America is particularly adept at improving. It is extremely important because improved productivity is another indication that inflation will be tamed, as labor costs are a major component of inflation.Read More

Rates Fall Again – Wow! Fed Day; Tale of Two Economies; Who’s Buying Record Level Government Debt? Is the Fed Like North Korea?

The average interest rate was over 8.0% in October, and today it is under 6.7%, as rates fell again in response to weaker-than-expected employment data. Today is “Fed Day,” meaning that the Fed is meeting to announce whether or not it will lower the Fed Funds Rate. Fed Chair Powell’s comments will likely move the markets much more than anything the Fed actually does – so expect volatility later today.Read More

Inflation Cools & Rates Shoot UP! Why? “Rates Down In March!” RATE ROLL-DOWNS

The markets are going crazy, as everyone tried to anticipate the Fed’s next move. When deciding to raise or lower rates, the Fed watches (1) the labor markets; (2) inflation; and (3) consumer spending – and ALL THREE sent the markets and rates into a tizzy this week.Read More

Why The Fed Must and Will Lower Rates!

I frequently remind readers that a recession is likely and that the Fed will lower the Fed Funds rate when the recession hits. The Fed will do this to revive lending, to make borrowing costs cheaper, and to stimulate the economy overall. The risk of doing so will be more inflation, but the Fed will likely have no choice if it wants to keep the economy from completely collapsing.Read More

1% Drop In Rates Brings 5 MILLION Buyers Into the Market; The Real Crash: Interest Rates

Joe Brown, Jeff Snider and Stephanie Pomboy spent the weekend just shredding Friday’s BLS jobs “positive” report. They pointed out how full-time (as opposed to part-time) job numbers are actually falling; how wages are flat (they’d be increasing if the labor markets were actually tight); how the BLS estimates are suspect and constantly getting revised; and how many of the jobs created were part-time, 2nd, or government jobs. In other words, the BLS is full of BS.Read More

Rates Hit New Record; Credit Card Stimulus; Rosenberg Says Today = 2007; Dollar Is Surging; CA Insurance Crisis; Thank God I Was Stupid In 1995

Mortgage rates hit a new 23-year record high today partially in response to initial jobless claims coming in lower than expected. Rates increased because investors know how much the Fed focuses on employment. But, I only wish the Fed would read my blogs about how unemployment only jumps after we are in a recession.Read More

Buyers Waiting For Rates to Drop (Solutions); It’s “Fed Day” too!

There are approximately 735 million buyers (give or take 734 million) on the fence right now, "waiting for rates to come down" - before they buy.Read More

The Death of Inflation; Some Fascinating & Necessary Perspective

Today’s inflation report came in surprisingly tame, despite rising energy prices. It is another indication that inflation is clearly waning, as both Jeff Snider and Barry Habib have been predicting for some time.Read More

More Great Inflation News; Rates FALL 1/2% This Week; Fed Victory Dance?

Another inflation indicator came into today below expectations – and rates fell even further. They have now fallen almost 1/2% this week!  In contrast last, I just blogged last week […]Read More

Rates Climb 1/2%! Will It Last? What’s Going On?

Rates have shot up almost 1/2 percent since late June – taking a particular beating over the last week (largely in response to strong employment data). We are back to […]Read More

Fighting Cash Offers; There Won’t Be More Rate Hikes

Perfect Buyer Lost Out to Lower-Priced Cash Offer – Needlessly The percentage of cash offers is way up this year, as most agents know, for a variety of reasons including: […]Read More

Recession, Depression, Soft Landing, High Rates, Low Rates – Who Do We Believe?

In late 2020, I was having lunch with several mortgage bankers who wanted to celebrate the success we were all having – as we were all enjoying unimaginable record profits. I, however, was not in a celebratory mood, telling them that rates would likely approach 8% in the coming years and that we needed to streamline and get much more efficient.Read More

Deciphering The Terrifying Housing Decline Numbers from Case-Shiller

Rates Fall in the Face of Fed Rate Increase Rates fell today even though the Fed will increase “rates” today. I encourage everyone to re-read or re-share this blog: The […]Read More