Fed Fireball! 30-year Mortgage Rate Breaches 5% As Fed Goes On The Offensive (Minutes Indicate Balance Sheet Shrinking Of $95 Billion Starting In May)

Confounded Interest ^ | 04/08/2022 | Anthony B. Sanders

[Browns Ultra Fan]

As the US Treasury 2-year yield hits 2.507% (up from 0.128% when Biden was installed as President) and the number of Fed rate hikes over by February 2023 hits 9.6, Bankrate’s 30-year mortgage rate breached the 5% mark at 5.04%.

The most recent data from on existing home sales show YoY sales in negative territory as The Fed begins in monetary fireball tightening.

The Fed’s minutes from the most recent meeting indicates that The Fed will shedding $95 billion a month from it swollen balance sheet. At almost $9 trillion mostly populated by Treasuries will be the first asset to run-off the balance sheet (there is almost $1 trillion of Treasuries maturing in 2022 and $856 billion maturity in 2023, etc), The Fed plans to shrink the balance sheet while, at the same, raising The Fed Funds target rate from it near zero levels.

The Federal Reserve has ignoring rules like the Taylor Rule since the financial crisis of 2008-2009, but seemingly are paying attention to the Taylor Rule because of 7.9% inflation. The Taylor Rule is suggesting a 20.42% Fed Funds target while the current target rate is 0.50%. Now THAT would be a real shock to the economy.

Powell: “Unleash the Fed Fireball on the 99%!”

[mewzilla]

From 1976...

The Power to Tax Is the Power to Destroy

[WASCWatch]

I hope Black Rock gets crushed with dropping real estate values.