The Fed Went Crazy During COVID Outbreak! M1 Money Grew 360% YoY In Feb 2021, M2 Money Grew 26.75% (Biden’s Miracle Jobs Market Is Largely Part-time, Not Full-time Jobs)

Perhaps Fed Chair Jerome Powell was listening to Prince’s “Let’s Go Crazy!” Because The Fed went crazy with money printing to counteract the shutdown of the US economy in 2020.

The US jobs market peaked in February 2020 under Trump at 152,309,000. Then COVID struck in March 2020 and the US economy lost almost 10 million jobs by December 2020. But when the fear ebbed and the economy opened back up, it took until June 2022 to recover the lost jobs. But since June 2022, the US economy has added almost 6 million jobs (many are part-time jobs and taken by foreign-born workers).

In terms of money printing, The Fed went crazy printing.

In fact, M1 Money year-over-year (YoY) rose a staggering 360% in February 2021. M2 Money, a broader measure of money, grew at a rate of 26.75% YoY in February 2021. Remember, Biden was sworn in as President in January 2021.

Yes, Biden’s purported jobs miracle is actually a part-time jobs recovery. Good luck buying a home on a part-time job.

Despite the staggering increase in money printing, TreasSec Yellen and Jared Bernstein still can’t explain why inflation isn’t transitory.

Surprise! Citi Economic Surprise Index Crashes To -7.30 (Home Prices UP 32% Under Biden, Mortgage Rates UP 160%)

Surprise! Just in time for the November election, this is a negative surprise that Biden doesn’t want to hear.

The Citi Economic Surprise index crashed to -7.30, the lowest since January 2023.

Under Biden’s leadership (hell, he and his family already own several mansions … on a Senator’s pay), home prices are up 32% under Biden and mortgage rates are up a staggering 160%.

Getting young households who rent to buy a home in this environment will require magic.

Biden’s Misrepresentation On Trump Tax Cuts, Someone Who Is Married With Two Kids Making $85,000 Will Pay $1,700 More In Taxes (Inflation Tax Is 166% Higher Than Under Trump)

I doubt if Biden really understands what he is saying. He simply reads (badly) off a teleprompter.

Biden has repeatedly claimed that no new taxes on anyone making less than $400,000. Remember, he has repeatedly said “You have my word as a Biden.” Which is worthless, by the way.

There are TWO taxes that are hitting people making under $400,000 per year. First, the INFLATION tax coming from Biden’s/Congresses spending binge, The Fed printing gobs of money, and insane regulations.

Biden and his mouthpieces like Karine Jean Pierre (KJP) claim that Biden inherited inflation from Trump. FALSE. Inflation was only 1.3% YoY in December 2020. Inflation was 3.5% YoY in March 2024, an increase of 166% over Trump’s final month in office. THAT is one heck of an inflation tax.

In House testimony, Treasury Secretary Janet Yellen (falsely) claimed that Biden’s massive tax increase won’t hit middle class households. That is a plain lie. the Tax Foundation said that someone who’s married, two kids, making $85,000 would pay $1,700 more in taxes. A married couple with two children making $165,000 annually would pay $2,450.50 more than in the previous year, while a family with three kids pulling in $200,000 per year will shell out almost $7,500 more per year.

So much for Biden’s “No one making under $400,000 will pay and additional penny of tax.” Between the inflation tax and Biden letting Trump’s Tax Cuts and Jobs Act’s (TCJA) expire, people making under $400,000 per year will get scalded. All so Biden/Congress can keep spending on Ukraine, fund endless wars, and buy countries cooperation with the US.

Janet Yellen Says It’s ‘Almost Impossible’ For First-Time Homebuyers To Enter Housing Market (Blames Rates Being Too Low That Households Locked-in Rates)

Treasury Secretary Janet Yellen told the House Ways and Means Committee that housing is impossible for first-time homebuyers. But doesn’t bother to confess that she is partly responsible because of her “too low for too long” Fed policies under Obama/Biden.

Yellen: Mortgage rates have been so low for so long that it’s created a lock-in effect where people don’t want to sell their homes to buy new ones for fear of losing their attractive rates.

That’s made it “almost impossible” for first-time homebuyers to enter the housing market, U.S. Treasury Secretary Janet Yellen said during her testimony before the House Ways and Means Committee.

Now hold on a minute, Janet. YOU were the one that kept rates too low for too long as Federal Reserve Chair.

Janet L. Yellen took office as chair of the Board of Governors of the Federal Reserve System in February 2014, for a four-year term ending February 3, 2018. She was succeeded by Jerome Powell.

What was her record on mortgage rates? Yellen kept the Fed target rate (upper bound) at 25 basis points under Obama/Biden until December 2015, so only one rate hike under Obama/Biden. Then came the election of Donald Trump in November 2016. Then Yellen raised The Fed target rate 4 times after Trump was elected.

Mortgage rates fell to 3.78% by November 2017, so Yellen helped keep mortgage rates low. But mortgage rates soared after Trump’s election to 4.22% by the end of her term.

There are other reasons why first-time homeownership is so difficult, like local NIMBY (not in my back yard) policies and the absolutely lousy labor market.

She added that Biden’s massive tax increase won’t hit middle class households (other than the massive INFLATION tax that was levied by Biden). That is a plain lie. the Tax Foundation says that someone who’s married, two kids, making $85,000 would pay $1,700 more in taxes. A married couple with two children making $165,000 annually would pay $2,450.50 more than in the previous year, while a family with three kids pulling in $200,000 per year will shell out almost $7,500 more per year.

So much for Biden’s “No one making under $400,000 will pay and additional penny of tax.”

The Stag In Stagflation! Non-farm Productivity In Q1 Grew At A Measly 0.3% Annuaized While Unit Labor Costs Soared 4.7%

Fed Chair Powell yesterday said he doesn’t see the “stag” in stagflation. Really?

Well, in Q1 in the US… it failed to show up as non-farm productivity – or nonfarm employee output per hour – rose at a measly 0.3% annualized rate after an upwardly revised 3.5% gain in the prior period (well below expectations)…

Source: Bloomberg

On the flip-side of that – and echoing the market-worrying ECI data earlier this week – Unit Labor Costs soared 4.7% in Q1 (well above the 4.0% expected and the 0.4% rise in Q4)…

Source: Bloomberg

So wage inflation is confirmed – rising at the fastest pace in a year – as all the gains we have been told to expect from AI just aren’t there in the data.

While quarterly productivity figures are quite volatile, a sustained slowdown represents another hurdle for the Federal Reserve’s inflation fight. With interest rates expected to stay at a two-decade high for awhile longer, business investment in equipment will likely continue to be a weak factor in overall economic growth.

Today’s data corroborates other data that showed gross domestic product cooled in the first quarter while employment costs rose by the most in a year. As a result, inflation is proving stubborn, supporting the Fed’s pivot to a more hawkish stance that will keep interest rates higher for longer than anticipated.

Of course, Fed Chair Powell told us yesterday that he “doesn’t see the stag or the flation” in US data…

Perhaps Cazadores tequila should be the official drink of the Biden Administration. It has the “stag” on the label and it is produced in Mexico … who Biden can’t (or won’t) stand up to.

Tequila!

Fed Will Likely Pause For 6th Straight Meeting (Mortgage Rates Are Already Up 161% Under Biden, MBS Returns Terrible!)

The Fed will likely pause rate cuts/increases when The Fed reveals their plans today.

Breaking: Federal Reserve officials are likely to hold interest rates steady at 5.25-5.5%—a 20-year peak—for a 6th consecutive meeting.

With inflation still high, rate cuts seem off the table for now.

Rate decision at 2pm Washington time.

The Street seems aligned.

Conforming rates are already up 161% under Biden.

According to Fed Funds Futures, no rate changes until after the Presidential election.

MBS returns have been abysmal under Biden/Powell.

Simply Unaffordable! Mortgage Demand (Purchase Applications) Fall 14% Compared To One Year Ago While HUD Energy Rules Will Add Up To $31,000 To New Home Prices (Payback Time Is 90 Years)

Housing in the US is simply unaffordable, particularly after HUD levied new regulation rising the cost of new housing up to $31,000. Wait for this to kick into the data for mortgage demand!

Mortgage applications decreased 2.3 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending April 26, 2024.

The Market Composite Index, a measure of mortgage loan application volume, decreased 2.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 1.4 percent compared with the previous week. The seasonally adjusted Purchase Index decreased 2 percent from one week earlier. The unadjusted Purchase Index decreased 1 percent compared with the previous week and was 14 percent lower than the same week one year ago.

The Refinance Index decreased 3 percent from the previous week and was 1 percent lower than the same week one year ago.

MBS returns are weak and volatile.

How is the Biden Regime making homeownership more affordable? They aren’t. The are using regulations, to drive the cost of new housing way up. New HUD energy rules will raise the cost of home construction by imposing stricter building codes. The National Association of Home Builders says the energy rules can add as much as $31,000 to the price of a new home. Payback time is 90 years (how long it will take the recoup the initial investment).

Under Biden’s “leadership” we are all addicted to gov. But at least Ukraine and Zelenskyy will be getting a guaranteed 10 years of financial support from the US … while E Palestine Ohio and Maui remain destroyed.

Keep On Printing! Home Prices Continue To Soar, Case-Shiller National Index UP 6.4% YoY In February

Janet Yellen, world class propagandist (US version of Baghdad Bob) and US Treasury Secretary under Biden, was so wrong about inflation. Instead of being “transitory”, turns out to be seemingly permanent.

Today’s Case-Shiller home price report was released for February. The National Home Price index was up 6.4% year-over-year. But look at the explosion of M2 Money and home prices. Hmm.

If we look at home prices and M2 Money on a year-over-year (YoY) basis, we can see the surge in money printing with COVID and the corresponding surge in home prices. As M2 Money growth slowed, the Case-Shiller National HPI slowed as well … until The Fed slowed the declined in M2 Money growth resulting in rising home price growth again.

So, The Fed will likely have to keep on printing. You can see Janet Yellen dancing to the thought of printing more money.

Tumbling Markets! Q1 Employment Cost Index Saw Biggest QoQ Jump Most In A Year (Stocks Decline, Treasury Yields Rise)

The Biden regime highlights the problem of politicians running the economy. Call it “Tumbling Markets.”

Highlighting just how sensitive the market is to any ‘inflation/deflation’ narrative questions, the Q1 Employment Cost Index (ECI) – a data point that is typically of secondary import – printed hotter than expected this morning and sent markets reeling.

The ECI rose from +0.9% QoQ in Q4 to +1.2% QoQ in Q1 (well above the +1.0% QoQ expected). That is the biggest QoQ jump in a year…

That was higher than the highest forecast…

Which leaves the civilian worker ECI up 4.2% YoY, stalling the disinflationary path it had been on…

In other words, persistent wage pressures are keeping inflation elevated.

This sent stocks tumbling lower…

…and Treasury yields higher…

Just add this data point to the ‘the disinflation narrative is dead’ side of the ledger.

Dallas After Midnight! Dallas Fed Manufacturing Contracts, Every Month Since May 2022 (Stagflation Warning!!!)

Dallas … and the US economy … after midnight.

The Dallas Fed Manufacturing Outlook survey has now been in contraction (below zero) every month since May 2022, falling modestly to -14.5 in April (worse than the -11.2 expected).

New Orders also remain negative (but did improve) and prices continue to rise (though at a slower pace). Labor market measures suggested flat employment and slightly shorter workweeks (hours worked index remained negative for a seventh month in a row) this month.

However, wit that said, wage pressure picked up dramatically this week to a seven-month high…

Source: Bloomberg

However, as always, we glean the most informative perspective from the respondents completed surveys where the pessimism shines through…

The business and political environment is terrible.
Business has not been this slow since COVID, and I’m worried.
Consumer confidence for consumer goods has noticeably worsened.
Customer orders have dropped. The indication is the economy is hurting spending in our area specifically. Customer uncertainty is worsening.
I keep thinking we’ll hit bottom and either level out or turn up, but we keep pushing those hopes out a month, and another month, and another.
There has been a decrease in new orders for three weeks now. Currently, we think this will come around, but we get more concerned as time goes on.
Industrial manufacturing is showing signs of positivity due to the possibility of an interest rate decrease. Please do it. Manufacturing is really hurting.

High prices remain problem for many businesses:

Inflationary pressures on raw materials and construction costs are driving up the cost of public projects. This is causing states to delay or scramble for funding for projects that have long lead times.
Business is generally good, but we’re starting to see more customer resistance to prices. Our costs have increased dramatically over the last two years, and we have customers asking to hold prices to last year’s level, which we just can’t do. We continue to make capital investments to improve productivity and reduce unit labor cost.

And finally, many are fearful of another four years of Bidenomics:

Political instability and politicization have hampered growth. We are entering stagflation.
Fewer governmental regulations would lower our cost of doing business. An example is the 332 report, which we must fill out for the U.S. government; it has no value for us, just expense.
Business is extremely slow, and we see no signs of improvement. We think it will stay slow until after the presidential election, after which, we will either have four more years of slow business or an improving economy.