Free Republic

One of the most senior economists in the United States says that the world's largest economy is still in the grip of an inflation crisis that will likely persist for the forseeable future. Loretta Mester is the president of the Federal Reserve Bank of Cleveland, which means she is currently one of the 12 people who determine the official interest rate in America. In an exclusive interview with the ABC, Ms Mester had a warning for Americans struggling under the pressure of steep price rises. "I don't have enough evidence now to even conclude that inflation has peaked in the...

The Fed is raising interest rates aggressively in an attempt to tame raging inflation. But according to legendary investor Rick Rule — former president and CEO of investment fund Sprott U.S. Holdings — things may not go as planned for America’s central bank. “I think they’ll chicken out,” he told Stansberry Research earlier this month. “If we had a period of real interest rates it would certainly cure inflation, but it wouldn't cure inflation until it did amazing damage to various balance sheets.” This isn't the first time Rule has voiced concern about the economy’s ability to handle substantially higher...

"I would say if you’re a home buyer, you need a bit of a reset," Fed Chairman Jerome Powell said yesterday.U.S. mortgage rates surged the most in more than 36 years this week, data from Freddie Mac indicated Thursday, as house buying costs continue to track the Federal Reserve's interest rate path amid the ongoing surge in domestic inflation. Freddie Mac, the biggest individual mortgage loan buyer in the country, said 30-year fixed mortgage rates surged to 5.78%, a half-point increase from last week and the biggest increase since 1987. The headline rate, Freddie Mac said, is the highest since...

The Fed has barely started raising interest rates but the air is already seeping out of the housing bubble.New single-family home sales plunged by 16.6% from March and were down 26.9% year on year. New home sales dropped to the lowest level since the lockdown in April 2020.New home sales are often viewed as a leading indicator of the state of the overall housing market.The unsold inventory of new homes spiked by 34,000, a historic month-to-month leap. There were 440,000 unsold new homes (seasonally adjusted), the highest level since May 2008 in the midst of the housing bust. Both, the...

The Federal Reserve on Wednesday raised short-term interest rates by 0.50%, as part of an effort to tamp down the inflationary pressures weighing on Americans. The central bank suggested that it will further raise borrowing costs throughout this year as it attempts to undo its pandemic-era, easy money policies. The policy-setting Federal Open Market Committee also detailed plans on unwinding its nearly $9 trillion balance sheet. The decision to raise rates by 0.50% marked the most aggressive increase made in a single meeting since May 2000. Over the last two decades, the Fed has opted to raise interest rates only...

After briefly falling below 6% last Friday, the average rate for a 30-year fixed-rate mortgage jumped up to 6.875%, increasing by more than one percentage point. The rate is nearly two percentage points higher than the average rate just one month ago. Rates for most other loan categories increased as well, although not quite so dramatically. The average rate on a 15-year fixed-rate loan, however, moved lower. The latest rate on a 30-year fixed-rate mortgage is 6.875%. ⇑ The latest rate on a 15-year fixed-rate mortgage is 5.143%. ⇓ The latest rate on a 5/1 ARM is 4.258%. ⇑ The...

An easing in core inflation pressures took the edge off the fastest headline reading since 1981 as headline CPI surged to 8.5% in March. U.S. inflation accelerated to the fastest pace in four decades again last month, data from the Bureau of Labor Statistics indicated Wednesday, but a slight retreat in core consumer prices suggests pressures may be easing heading into the summer months. The headline consumer price index for the month of March was estimated to have risen 8.5% from last year, up from the 7.9% pace in February and the fastest rate since December of 1981. On a...

Applications for mortgages are dropping as mortgage interest rates keep rising while home sellers are lowering their prices as additional supply hits the market, according to multiple reports.The interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) was 4.90 percent in the week ending April 1, up from 4.80 percent a week ago, an April 6 news release by the Mortgage Bankers Association (MBA) stated.Rates for those with loan balances greater than $647,200 rose to 4.51 percent from 4.40 percent while 30-year fixed mortgages backed by the FHA saw interest rates rise from 4.66 percent to...

WASHINGTON (AP) — America’s hiring boom of the past year has narrowed racial disparities in unemployment. Yet the Federal Reserve’s ongoing interest rate hikes — shaping up to be the steepest in 15 years — threaten to reverse that progress. Such rapid hikes typically slow borrowing and spending and can raise unemployment and even cause a recession. During such downturns, Black and Hispanic Americans commonly suffer higher jobless rates. “The reason why this matters in the Black community is because we are literally the last hired, and it’s only when you get to this point in a recovery where black...

As the latest existing home sales report cautioned, with NAR chief economist Larry Yun warning that “housing affordability continues to be a major challenge, as buyers are getting a double whammy: rising mortgage rates and sustained price increases,” BofA joins the chorus warning that last year’s housing euphoria is unlikely to repeat and this year will be a much more challenging year for the housing market given significant headwinds to affordability and ongoing supply-side challenges. Among the numerous headwinds facing US housing, BofA warns that the Russia/Ukraine conflict adds a new factor to the mix as higher oil and commodity...

The Federal Reserve System is raising interest rates at last. It's about time. If you've been putting off refinancing your house, it's probably a good time for it; rates won't get any lower. The business pages say that the Federal Reserve is finally doing its job. They say that keeping inflation in check (well, really, keeping the dollar steady, stable and respected might be a better way to put it) is the Fed's purpose, and that is certainly true. But it's not the whole story... and if you believe the media line that rate hikes from the Fed alone will...

Cathie Wood said investors are making a mistake by piling into index funds. Companies that have prospered in the past are often ripe for disruption, the Ark Invest boss said. The tech-stock guru said it's riskier to own benchmarks than Ark's funds. Cathie Wood said risk-averse investors and fund managers are putting money in companies and benchmarks based on past successes, instead of betting on innovative companies. "We have, I think, one of the most massive misallocations of capital in the history of mankind. You have investors investing in the past," the CEO and CIO of Ark Invest said in...

Call this “The running of the Bull(ard)s mouth.” Federal Reserve Bank of St. Louis President James Bullard said he supports raising interest rates by a full percentage point by the start of July — including the first half-point hike since 2000 — in response to the hottest inflation in four decades. “I’d like to see 100 basis points in the bag by July 1,” Bullard, a voter on monetary policy this year, said in an interview with Bloomberg News on Thursday. “I was already more hawkish but I have pulled up dramatically what I think the committee should do.” Bullard’s...

The FED announced over the weekend that it has scheduled a closed meeting for Monday morning. TGP reported on this on Thursday. The FED has scheduled a meeting for tomorrow morning at 11:30 am. On Friday morning The Gateway Pundit reported that the Fed was going to increase rates on either Friday or Monday. The rates stayed the same on Friday so tomorrow’s meeting might be scheduled so the Fed can increase rates. Inflation is out of control and the Fed now feels it has to do something. If the Fed does increase rates, this will be only the second...

Anyone who's ever listened to Stephanie Ruhle's commentary on either NBC Nightly News or her failing daytime show on MSNBC will realize she is extremely partisan and very dumb when it comes to basic economics. She proved this once again during a segment on Wednesday night's NBC Nightly News when she made the preposterous claim that when the Federal Reserve raises interest rates, it means "the economy is doing well." During a segment on the announcement from the Federal Reserve that the central bank will keep interest rates close to zero and begin raise rates in March, anchor Lester Holt...

The Federal Reserve signaled Wednesday that it plans to begin raising its benchmark interest rate as soon as March, a key step in reversing its pandemic-era low-rate policies that have fueled hiring and growth but also escalated inflation. With high inflation squeezing consumers and businesses and unemployment falling steadily, the Fed also said it would phase out its monthly bond purchases, which have been intended to lower longer-term rates, in March. The Fed’s actions are sure to make a wide range of borrowing — from mortgages and credit cards to auto loans and corporate credit — costlier over time. Those...

Today, I heard two local, small town radio DJs going on about rate hikes coming down the pike, and I thought wow here we are again with rate-hike-hysteria. Eight years ago I posted an article, Interest Rates Cannot Rise, Here’s Why In that article I depicted my model, forecasting that interest rates would not and could not rise. Now remember 2014 was the peak messaging period by the Fed and Wall Street gearing up for “rate normalization”. So to go on record stating that rate normalization was impossible, was a risky move. In fact, a friend, who is a friend...

As the new year begins, investors are wondering what the year ahead will hold. Will the U.S. stock market continue to break records? Or will we see a catastrophic correction and recession?Everywhere I look, pundits are talking about the overvaluation of the stock market and the potential for market crashes ahead.It’s true, the stock market has gone up a lot over the last couple of years. The Dow is up almost 97% from its pandemic low in March 2020. The S&P 500 is up 114% over the same time.Yet, bull markets don’t end because they run out of buyers. They...

The Fed statement and economic projections saw the central bank double the pace of its asset purchase tapering to USD 30bln per month (consisting of USD 20bln Treasuries, USD 10bln MBS – this will be doubled again in January, with similar reductions likely be appropriate each month thereafter), which puts it on course to conclude asset purchases by March, from the prior landing zone of around June, although this could be adjusted if warranted.Its updated projections now see three rate hikes in 2022, revising up its view from one hike pencilled in at the September FOMC (recall that September, the...

WASHINGTON (AP) — The Federal Reserve will quicken the pace at which it’s pulling back its support for the economy as inflation surges, and it expects to raise interest rates three times next year. In an abrupt policy shift, the Fed announced Wednesday that it will shrink its monthly bond purchases at twice the pace it previously announced, likely ending them altogether in March. The accelerated timetable puts the Fed on a path to start raising rates in the first half of next year. The Fed’s new forecast that it will raise its benchmark short-term rate three times next year...