Posted on 04/05/2022 9:45:22 AM PDT by Browns Ultra Fan
When Federal Reserve Governor Lael Brainard speaks, markets listen
Federal Reserve Governor Lael Brainard said the U.S. central bank will continue to tighten policy methodically and shrink its balance sheet at a rapid pace as soon as May.
Brainard’s hawkish remarks sent bond prices crashing and 10Y bond yields up over 16 bps.
While Bankrate’s 30Y mortgage rate is down slightly today, the surge in the 10Y and 2Y Treasury yields could push mortgage rates above 5% by tomorrow,
Even Europe is feeling Brainard’s wrath. Italian 10Y sovereign yields are up almost 20 bps.
The NASDAQ index is down 300 points on Brainard’s utterance.
Gee thanks Lael from all us wanting to finance the purchase of a house.
Brainless and Brainard.
(Excerpt) Read more at confoundedinterest.net ...
Mortgage Rates Will SOAR!!
This explains the brief bump in Gold and Silver I saw today.
I’m ready! I always wanted to be a Cash Buyer.
Typically, when they shrink the balance sheet, they let the securities run off and don’t reinvest. That means it takes a while for the two years or the ten years to be up.
Do they propose to actually sell off the existing securities into the public markets?
This would have a significant impact on the Federal budget, because the Fed remits the interest on these bonds to the government.
“The NASDAQ index is down 300 points “
So why didn’t this drama queen say all that did was reverse out yesterday’s gain?
“Gee thanks Lael from all us wanting to finance the purchase of a house.”
Let’s see, do you want home prices to rise another 50%? Or do you want to have to pay an extra point or two in interest?
Cuz those are your options.
The Democrats have created a perfect scapegoat in the form of Putin by pushing the Ukraine situation to the brink of WWIII. They have decided that their best chance of maintaining power and forming a new “world order” is to create an extreme crisis either in the form of WWIII and/or complete economic collapse. None of this is an accident, or even bad judgement; it is a strategy.
> I’m ready! I always wanted to be a Cash Buyer.
Ditto.
So you're looking at a house that was worth $400,000 two years ago, and you want to make an offer of $600,000 on it today ... and you're blaming this guy Lael because you're going to have a harder time borrowing money to make that deal?
Lael Brainard might just be saving the author's ass from one of the dumbest decisions he could make in his lifetime.
“Biden and Brainard are killing us.”
The ONLY error the Fed is making is not being hawkish enough fast enough.
The balance sheet should be completely cleared in one year.
Rates should go up at least a full point per quarter until all signs of inflation are exterminated.
It would be a horrifically painful experience. No doubt.
But not as painful as avoiding the elephant in the room.
Well, that should knock down housing prices real quickly.
Then all these recent buyers will be underwater on their inflated mortgage.
What could go wrong?
“What could go wrong?”
It’s like a forest fire.
Long term it’s quite healthy for the economy.
Short term is a devastating conflagration.
Would you rather have hyperinflation?
Need to be raised, a decade of interest rate nonsense.
She has all the demoncrap credentials.
May as well bump the interest rates to cool things down. The market is in the dumper anyway and even with low rates will stay there for this administration until the destruction is stopped. I’ve figured on just a slow burn or idle for quite some time. Three years is the norm to begin return to the mean. Meanwhile, this economy is going nowhere.
Maybe interest rates and mortgage rates will go back to 6% or so to provide some steerage to stimulate the economy when needed.
I’m happy to see the 2 and 3% party end if it does and happy to see some fools who parted with their money driving prices sky high burned.
How about just saving for a down payment in a low inflation setting? What a concept! 20% or more down? Oh my!
Agree but there is the debt service but I’m thinking it is so bug it does not matter much anymore.
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