Posted on 11/13/2023 7:34:50 AM PST by Kaiser8408a
The Talking Heads at The Federal Reserve keep yammering about persistant inflation (which Yellen kept saying was transitory) and whether or not Fed rate hikes will be necessary to get infation to 2%.
Instead of muddling lectures (like by Atlanta Fed President Rafael Bostic) on Fed tightening to fight inflation, let’s address the elephant in the room (no, not Chris Christie or Hillary Clinton), but Morgan Stanley’s soft landing forecast of a Fed Funds rate cut from 5.50% today to 2.375% in 2024. This is a whopping 215 basis point cut!
Currently, the spread between the 30-year conforming mortgage rate and The Fed Funds Target rate is 1.981% of 198.1 basis points. While the better spread is the mortgage rate compared to the 10-year Treasury yield, I am going to use Morgan Stanley’s Fed Funds target rate forecast for 2024. Assuming the spread is constant, this results in a mortgage rate in 2024 of … drumroll … 5.50%.
In one sense, a 200 basis point decline in the 30-year mortgage rate would be welcome news to home buyers. On the other hand, Morgan Stanley is forecasting a soft landing and a rise in the unemployment rate to 4.3%, hardly good economic news.
So, fear the talking Fed. They are talking about fighting stubborn inflation while ignoring the slowdown forecast for 2024.
(Excerpt) Read more at confoundedinterest.net ...
“let’s address the elephant in the room (no, not Chris Christie or Hillary Clinton),
Planned on getting a new keyboard anyway as they never recover from coffee splashes LOL.
If MS is right, then equities are cheap. I do not really believe they are right. Would be nice, though.
Good luck with selling more American debt.
Good luck with selling more American debt.
A mortgage intrusion
A mortgage rate intrusion
And insurance % intrusion
Do not equal to:
Ownership
Well surprise, surprise, surprise. 2024 is an an election year.
You sure about that? I am not and am betting they will try to cancel the election.
Color me shocked. 😏
Actually, keyboards do recover from coffee splashes if you immediately turn them upside down and let them drain.
Now, hot chocolate is another matter...
I’m buying $250k-$300k of it a month of it and I like it. The same amounts mature every month. Most of it matures every 3 months with a few 6 month Bills here and there. Income is about $3,600 a month.
3years ago did these geniuses predict 5% interest rates? Ya what is equilibrium interest rate when deficits is 8% of GDP?
3years ago did these geniuses predict 5% interest rates? Ya what is equilibrium interest rate when deficits is 8% of GDP?
??? But but but it’s not FDIC insured!!!
j/k
I am fixin’ to buy me some of that gubmint debt even as I speak. Or type.
“...forecast of a Fed Funds rate cut from 5.50% today to 2.375% in 2024”
This news is only for the election year. The democrats have been lying about the economy forever.
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