Federal Reserve

Mortgage Rates at Record Lows as 10-Year Treasury Yield Crashes Below One Percent

It has been an exciting week, and it's only Wednesday. After a massive market ramp on Monday failed to extend into a two-day rally, the Federal Reserve did what many, including myself, expected them to do. Jerome Powell and his central bank cronies pulled out an emergency 50 basis point cut to the Fed Funds rate. The Fed rate cut was little more than the Fed playing catch-up to the actual drop in market rates which were crushed by the ongoing coronavirus economic blowback. The Fed's poorly telegraphed rate cut was followed by a near [...]

Texas Realtors Pay Over $6 Million For Bogus Research At A&M RECenter

"The first rule of fight club is: You do not talk about fight club." Texas Realtors continue to throw money at bogus research at the Texas A&M Real Estate Center. Many Texas Realtors probably don't even know that a portion of their annual licensing dues goes to pay the salaries of the staff at the RECenter. Many are probably unaware of how they are being shortchanged by this Texas institution which is still partnering with the Federal Reserve when it comes to economic research. That is a shame, because the garbage being produced by the [...]

Hoisington Quarterly Review: Parallels of Past Fed Mistakes

Hoisington Investment Management has released their latest Quarterly Review, and it's certainly worth a read if you want to understand the Federal Reserve's capitulation on policy normalization and the stagnating global economy. The global economic slowdown should really not be surprising considering the massive amounts of stimulus by global central banks which have resulted in massive amounts of debt and economic bifurcation. The problem with quantitative easing and all of the central bank intervention is that liquidity has not not been used for productive, organic growth. As the debt keeps piling up, the economic benefit [...]

Denton County Real Estate Market Gets Lift From Crashing Yields, Lower Rates

The Denton County real estate market is getting a much-needed lift going into the spring selling season. That lift is coming courtesy of crashing bond yields and a drop in mortgage interest rates. Lower interest rates were desperately needed to stimulate a stagnating housing market. The Freddie Mac Primary Mortgage Market Survey confirmed today what many have been expecting.... a continued drop in mortgage rates. Freddie Mac's index just posted the biggest one-week drop in a decade. If the economy continues to slow, 3 percent mortgage rates could be in play again. That could be [...]

Fed Says No Rate Hikes In 2019, Balance Sheet Drawdown Ending In September

The Jerome Powell cave is now a comical farce. Aside from using the word "patient" about 30 times in the March FOMC statement, Jerome Powell told us the Fed does not expect to hike interest rates at all in 2019. To top things off, the Fed balance sheet that was on autopilot at the end of last year will now end this September. In terms of the Fed's projections for the economy, growth was revised down and the unemployment rate was revised up slightly. "In light of global economic and financial developments and muted inflation [...]

Caveman Powell Looking To Levitate Stock, Housing Bubbles

Yesterday the Federal Reserve yelped like a whipped puppy as Jerome Powell turned into the latest iteration of his market-dependent Bernanke/Yellen/Greenspan predecessors. If you remember, Mr. Powell was here in the DFW area back in November playing up the fabulous state of the U.S economy and the Fed's wonderful policies. At the time expectations were that the Fed would be raising the Federal Funds rate four more times this year with a balance sheet reduction schedule that was supposedly on "autopilot" to the tune of $50 billion per month rolling off. Flash forward one quarter [...]

Powell Continues FOMC’s Legacy Of Serial Arsonists

The Federal Reserve FOMC announced another Federal Funds rate hike, raising the target rate to 2.5 percent. That was widely anticipated. What the market did not like was a less-than dovish stance from Jerome Powell and his merry band of serial arsonists, as he stuck to the script that everything is awesome in the land of milk and honey. Aside from the drop in 10-year Treasury yields, there are important ramifications for the real estate market as the failures of Federal Reserve policy, and the consequences that come with it, become increasingly evident. Make no [...]

U.S. Existing Home Sales Down Seven Percent In November

The National Association of Realtors reported existing home sales for November at a seasonally adjusted annual rate (SAAR) of 5.32 million. This was up slightly from October but still down seven percent compared to the same time last year. The spike in mortgage interest rates was still lingering over the real estate market in November. The median price of an existing home sold in November was $257,700 in November, a rise of 4.2 percent year-over-year and the 81st consecutive month of year-over-year home price increases. The average price of an existing home sold in November [...]

Yield Curve Inversion And Denton County Real Estate Prices

With renewed talk of yield curve inversion during the past week Denton County real estate prices are going to be interesting to watch. Some people are wondering how low the Federal Reserve's balance sheet will go as the try to unwind/reverse years of quantitative easing. As I was commenting earlier this morning, that balance sheet probably won't go as low as Fed officials originally planned. For all of the collective PhD economic talent employed at the Fed, they still can’t forecast their way out of a paper bag. The Fed has barely rolled off 10 [...]

Powell Keeping Federal Reserve’s Waffle House Open For Business

Not more than two weeks after he was touting the strength of the U.S. economy and how we are in such a good place, Fed chairman Jerome Powell, tossed out a slightly dovish speech to the audience at the Economic Club of New York. The title of the event was the 'Federal Reserve's Framework for Monitoring Financial Stability'. They could just as easily called it sticking your finger up in the air to see which way the wind is blowing. While tossing out the typical central banker sound bites, Powell continued the long standing Federal [...]

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