Confounded Interest – Anthony B. Sanders
Financial Markets And Real Estate
US prices rose 0.3% MoM in June according to the Bureau of Labor Statistic (BLS). And on a YoY basis, inflation rose 2.7% while core inflation rose 2.9%.
Supercore inflation was up 3.017% YoY.
As of May, import prices rose a scant 0.0% MoM and 0.2% YoY.
Shelter rose 3.8% YoY in June while gas utilities rose 14.2%.
And on this news, the yield on 30-year Treasuries rose 5%.
Not a chance that Foul Powell will cut rates now.
Thank goodness “Statist Joe” Biden is gone. Kamala Harris is still lingering around the edges, while the mortgage and housing markets are still suffering from the Biden/Harris regulatory overreach.
Mortgage applications increased 9.4 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending July 4, 2025. Last week’s results included an adjustment for the July 4th holiday.
The Market Composite Index, a measure of mortgage loan application volume, increased 9.4 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 13 percent compared with the previous week. The seasonally adjusted Purchase Index increased 9 percent from one week earlier. The unadjusted Purchase Index decreased 13 percent compared with the previous week and was 25 percent higher than the same week one year ago.
The Refinance Index increased 9 percent from the previous week and was 56 percent higher than the same week one year ago.
Mortgage rates moved lower last week, with the 30-year fixed rate decreasing to 6.77 percent, its lowest level in three months. After adjusting for the July 4th holiday, purchase applications increased to the highest level of activity since February 2023 and remained above year-ago levels.
Biden claims the foreign leaders have been calling him for advice. Here is one example.
It’s Gov’t Gone Wild! That includes The House, Senate, President and Federal Reserve.
The purchasing power of the US Dollar was $1004.4 on 1915-03-01. By 2025-05-01, the purchasing power fell to $31.1, a loss of 97%. Public debt since the last year of GW Bush, Obama/Biden (with a brief hiatus with Trump) rose 317% since January 2009.
M2 Money printing grew 210% since January 2009.
So much for the doom porn about tariffs or anything Trump. The US economy is booming. Example? Non farm payrolls (NFPs) in June rose by 147k jobs added.
As opposed to yesterday’s negative ADP report, the NFP continued to grow despite fears of tariffs, etc.
The positive jobs report likely killed any chance of a Fed rate cut at the next meeting.
Covid, the gift that keeps on giving. Government spending grew enormously with Covid in 2020. As a result, M2 Money has grown 34% just since 2020.
At least M2 Velocity is growing again.
Finally, US government debt growth (YoY) was approximately equal to US nominal GDP growth in Q1 2025.
Unfortunately, the BBB (Big Beautiful Bill) is projected to add $3.9 trillion of debt. Unfortunately, there are insufficient spending cuts in the BBB. And the Senate just nixed kicking illegal immigrants off of Federal healthcare programs.
Unfortunately, GDP growth is only expected to be modest with debt growth once again rising faster than GDP growth. As Diane Feinstein once said, politicians are elected to spend money. This, of course, was a ridiculous statement embraced by spend-crazy Democrats and RINOs.
So, Congress has committed American taxpayers to debt slavery.
The US Treasury yield curve is flattening at the short-end (2-3 years) but remains unchanged at the long end (>= 20 years).
And pending US Home Sales remain low.
It will take a while to recover from Biden’s horrid economic follicies.
New home sales are going down.
New home sales plunged in May, the biggest MoM drop since June 2022.
The median sales price increased 3% from a year ago to $426,600 last month, marking the first year-over-year price gain in 2025.
The plunge in new home sales came as mortgage rates ticked back higher.
Another example of the carnage left behind by President Autopen (Joe Biden).
The housing markets is in bits and pieces following The Fed’s fickle management of interest rates and Biden’s disastrous spending policies. U.S. household net worth fell by 0.93% in 1Q2025 … largest decline since 3Q2022, but not necessarily comparable to that quarter in terms of magnitude.
Bitcoin just broke below $100k.
What will The Fed? As I have said over and over again, The Fed needs to cut rates.
Fed Chair Jerome Powell’s favorite song: “No sugar tonight” for the mortgage market. The Fed provided plenty of sugar during the Covid crisis of 2020.
Mortgage rates grew under Biden from under 3% to nearly 8%, helping to choke off housing demand.
The good news? Median home price growth YoY has been negative since 2023 whilr average hourly earnings YoY has been positive and steady.
Please Jerome, lower rates!! We are in a ring of fire with high housing prices and high mortgage rates.
Confounded Interest - Anthony B. Sanders 
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