Federal government spending is that hideous strength that keeps on chugging along, despite higher rates.
That pushed the YoY price up to +6.59% (in line with the +6.60% exp).
“Our National Composite rose by 6% in January, the fastest annual rate since 2022.” According to Brian D. Luke, Head of Commodities, Real & Digital Assets at S&P Dow Jones Indices.
“For the second consecutive month, all cities reported increases in annual prices, with San Diego surging 11.2%”
Given the smoothing and heavy lag in the Case-Shiller data, it’s hard to find a causal relationship between prices and mortgage rates, but with rates remaining above 7%, it seems hard to believe prices can continue their advance…
…and we just saw median new home prices tumble (though median existing home prices did increase).
How is Powell going to cut rates when home prices are rising at over 6% per year?
Meanwhile, after declining in February, analysts expected a small rebound in The Conference Board’s consumer confidence print in March, but instead it dropped further to 104.7 (vs 107.0 exp) from 106.7 as expectations plunged but current conditions improved…
However, for the 5th straight month, the conference board’s headline confidence print was revised downward…
That is 13pts of ‘confidence’ erased in the last five months… to which we ask again – …how do you revise consumer confidence?
The Conference Board’s indicator inflation expectations rebounded modestly to +5.3% – still notably high but trend in the right direction…
The Board’s labor market indicator trended modestly weaker (after being revised higher)….
And finally, expectations for stocks to increase from here are at their highest since Jan 2018…
…that did not end well for stocks.
Government spending and debt are the hideous strength that is driving inflation.
Confounded Interest - Anthony B. Sanders 
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