Keyword: rates
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Foul Powell on the Prowl! Despite Powell’s confusing messaging on inflation, the market is pricing in an 80% chance of a rate cut in March 2024. The Fed’s dots plot shows the same thing: Fed target rate falling like a paralyzed falcon. As gold soars to an all-time high. The difference between California governor Gavin “Toothsome” Newsom and Leave it to Beaver’s Eddie Haskell is that Eddie Haskell was more sincere.
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Its the Biden Bop! As Bidenomics continues its blitzkrieg on the US economy with the Federal government massively expanding its debt while households and business cut back on debt. The US government is the only sector to have notably borrowed on a net basis over the last five years. The market sees that as inflationary, driving yields higher. The pandemic saw an increase in the borrowing of all sectors. But it was the government that saw the biggest rise in GDP terms, and it is the government whose debt is still considerably higher than it was before the pandemic –...
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Like President Biden enjoying a barbeque at The White House with a live band (probably NOT Justin Moore singing “Small Town USA”) while Hamas declared war on Israel and Americans are being held hostage with the promise of public executions of hostages livestreamed. Nothing that “Empathy Joe” does ever surprises me anymore, but I am surprise that various Federal Reserve Presidents will speak today while Hamas terrorizes Israeli and US citizens. It could be that investors think that Talking Heads at The Fed will claim that Fed rate increases are over. Then again, the Iran/Hamas terror campaign against Israel is...
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Blue state taxpayers were hit with the highest residential electricity rates in June, outpacing most Republican-controlled states, according to data recently published by the U.S. Energy Information Administration (EIA). Of the 20 states with the highest residential electricity rates in June, 16 of them have Democratic governors, according to the EIA data. The most expensive residential rates of the continental 48 states in June were Connecticut, California, New Hampshire, Maine, Massachusetts, Rhode Island, New York and Vermont, all of which President Joe Biden won in 2020, according to the EIA data. The least expensive states in the contiguous 48 were...
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Fear the talking Fed! Various Fed Presidents are talking this week and when they do. WATCH OUT! The latest fear mongering will be … inflation is persistent and they might have to keeep raising rates. The two-year Treasury remains above 5% and the 10Y-2Y T-Curve remains inverted. The likelhood of another Fed rate hike is growing. While inflation is cooling (but still elevated), The Fed could choose to rate hikes again. Best picture of Lael Brainard, Director of the National Economic Council of the United States and former Federal Reserve member and talking head. Or screaming head.
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The Fed’s Dot Plot, the Open Market Committee’s guesses as to Fed rate policy in the future, despite Treasury Secretary Janet Yellen saying everything is beautiful in the US economy. Then Janet, why is The FOMC siganling a rate cut from 5.6% to 3.6% by 2025? The Federal Reserve’s dot plot for September will push back on the notion of aggressive rate cuts that the markets are pricing in for next year. The median of indications will show that policymakers expect a decline in the benchmark rate of as little as 50 basis points or 75 basis points for 2024,...
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I ain’t never been to Spain, but the US under Biden is like Spain in terms of default risk. Actually, I have to Spain numerous times and love visiting Barcelona. But the US debt fiasco under Biden and Congressional spending sprees has led to … US credit default swap being priced worse than Spain’s CDS. With Biden/Congress orgy of spending (and a declining economy in many important respects), the US is seeing Federal debt near $33 TRILLION and even worse, unfunded Federal liabilities (promises, promises) are at $193 TRILLION, almost 6 times the current Federal debt load. If you are...
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As the late crooner Jimmy Buffet sang, the US economy is wasting away in Bidenomicsville, looking for our lost economy for the middle class and low wage worker. As Bidenomics fails to do anything other than make big donors wealthier (green energy companies, big tech and union bosses, etc), we are seeing the impacts of Fed monetary tightening to combat inflation caused by Biden/Pelosi/Schumer’s spending spree. First, the 10-year REAL Treasury yield is close to breaching 2%. Second, 30-year mortgage rates are now 7.62%, up over 150% under Bidenomics. Third, mortgage purchase applications crashed to the lowest level since 1995....
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Another economic report on Bidenomics. This one is for housing. Realtors Pending Home Sales Index (PHSI)* – a forward-looking indicator of home sales based on contract signings – rose 0.9% to 77.6 in July. Year over year, pending transactions fell by 14.0%. An index of 100 is equal to the level of contract activity in 2001. Combine that with crashing M2 Money growth (lowest since 1933 and The Great Depression (and The Dust Bowl). The difference is that the US had the soothing talks of Franklin Roosevelt “I can assure you that it is safer to keep your money in...
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Maui Joe Biden received a lot of help from his friends at The Federal Reserve! Thanks to the crippling effects of Bidenomics (Fed easing then tightening to combat inflation caused by insane green spending and a war in Ukraine), US mortgage rates (conforming 30-year) has increased 159%. On the yield curve side, the US Treasury curve 10Y-2Y CMT fell from 99 basis points the day after Maui Joe was sworn-in as El Presidente to the inverted curve we see today (-63 basis points). Dynamic Maui Joe looking less than happy trying to visit Maui while he could be partying with...
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Yes, The Fed has a line on you! And will likely keep raising rates as inflation stays elevated. This means higher mortgage rates unless China slips into a deflation doom loop. Thanks in part to The Fed, housing affordability is at the lowest level since the 1980s. And we are seeing tail volatility in the US Treasury futures. Then we have consumers being tapped out. Despite retail sales (reported on Tuesday) crushing it (a 1% increase for the control group in July after a 0.5% increase in June), there is a narrative that the consumer is getting tapped out. Fastest...
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What is the difference between a porcupine and the KC Fed Jackson Hole conference? At the annual Jackson Hole Federal Reserve retreat, the pricks are on the inside! (Source: Clive Owen from “Shoot ‘Em Up” about drivers of BMW cars). Yes, the elites of The Federal Reserve System will gather at Grand Teton National Park in Wyoming to discuss “Structural Shifts in the Global Economy,” and will be held on Aug. 24-26. Here is where we sit on Sunday. The 30-year conforming mortgage rate (blue-green line) is over 7% and up 154% under Biden. The Fed’s target rate is now...
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On Monday, Argentina’s central bank raised #interestrates to 118% as Argentina 30-year mortgage is now at a record 82.2%. There is a record 350 Argentine Pesos for each US Dollar. All courtesy of Argentina’ version of Bidenomics … top down direction of spending and regulation and an out of control Central Bank. Don’t cry for Argentina. .They voted for endless Peronist polices (Justicialist Party). Say, are Joe and Jill Biden the new Juan and Eva Peron?
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“Ice Cream Joe” Biden is at Lake Tahoe for a week, probably to avoid being asked questions about his tin-ear respoonse to the tragic Maui fires that have killed 99 people so far. Instead, Joe is inappropriate chuckling (he doesn’t care!) and taking photo ops of him eating ice cream. The Biden administration angered a lot of people when it was announced that households that have been affected by the fires would only be getting a one time emergency aid payment of $700 while he gives billions for Ukraine. After last month’s surprisingly large declines, Housing Starts and Building Permits...
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Bob Wood, 66, has been thinking of selling his home in Mobile, Alabama. The finance professor and his wife, Terri, purchased the 5,000-square-foot house with a pool nearly a decade ago. “It’s probably time to downsize,” he said. They would also like to be closer to their grandchildren in Tennessee. And yet, “we are in the 10th year of a 3.125% 15-year fixed mortgage,” he said. They don’t want to move now and give up that low rate to buy at a higher rate. “We just don’t want to pay that much in interest.” Wood is among “a stock of...
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US Treasury yields are up today along with 30-year mortgage rates. There is a lot happening in bond markets. It’s been a tumultuous week for yields, with the Bank of Japan’s policy tweak, and the Treasury increasing its funding needs. But Fitch was the weatherman with its US downgrade, telling us about the downpour we can see for ourselves just by taking a glance at the fiscal data. In short, the US faces a perfect storm of a vertiginous fiscal deficit, a near-historically swollen debt load, ballooning interest-rate costs and collapsing tax revenues. First, the deficit. It’s close to historical...
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I can not even begin to explain the complete outrage and livid anger towards the government I have now. I can not put it into words. The government (Biden and his minions in particular) flat out lies about inflation saying it is moderating, or, going down... blah, blah, blah and Physician's Mutual just raised my supplemental insurance rate by 9% and Mutual of Omaha just raised theirs nearly 18%!!! Everything I even look at in the store to buy is now outrageously priced and gasoline jumped up to $3.50 for regular around here and even more. The things we buy...
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Commercial real estate (CRE), particularly office space, reminds me of the Arthur Brown tune “Fire!” except that Jerome Powell of The Federal Reserve is the God of Hellfire! While fighting inflation caused by … The Federal Reserve and insane Federal spending (aka, Bidenomics). Call this the Over, Under, Sideways Down economy. The top 1% are doing quite well, while the lower 50% of net worth households are struggling. The Q1 2023 NCREIF Office property (value) index shows declining office value since Q2 2022 as The Fed began raising its target rate to combat inflation. From Trepp, we have this shocking...
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The “public interest” does not mean “special interest.” Regulators of Colorado’s public utilities corporations should learn the difference. The full mission of Colorado’s Public Utilities Commission is it “serves the public interest by effectively regulating utilities and facilities so that the people of Colorado receive safe, reliable, and reasonably priced services consistent with the economic, environmental and social values of our state.” That means serving the highest values of nearly 6 million diverse individuals with every imaginable set of priorities. It does not mean serving the highest values of wealthy climate change activists or the political party in power. The...
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California’s electric rates are among the highest in the country. Three big power companies propose charging fixed rates based on income, saying low-income customers will save money. Critics doubt it’ll work.
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