Alarm! Fed’s Bullard Says US Recession Fears Overblown With Consumers Healthy (My Response In One Chart: REAL Average Wage Growth At -3.34% YoY, Real GDP Growth At … 0%)

Alarm!

No problemo, says James “Bully” Bullard, President of the St Louis Federal Reserve. Bullard said that US recession fears are overblown with consumers “healthy.”

Really Jim?

Inflation is so bad they REAL average hourly earnings growth keeps falling and is now -3.34% YoY.

Apparently, real GDP growth of ZERO doesn’t bother Bullard either.

Apparently, we are still Under The Thumb of The Federal Reserve.

Weekend Update! Fed Quantitative Frightening, Growing Recession Likelihood, Mortgage Rates And Gasoline Prices Drop Slightly (Out Of Time?)

The US economy is out of time.

As a recession approaches, we are seeing the WIRP implied Fed o/n rate (green line) declining. And with The Fed chickening-out, we saw a surge in equities (NASDAQ composite index in blue).

Gasoline prices are falling too (orange line), but due to rising global economic slowdown. But notice that The Fed’s balance sheet (yellow line) is still growing despite repeated signals that Covid stimulus would be removed (I call this Quantitative Frightening).

As I mentioned above, The Fed has stopped trimming their balance sheet despite signals to the market of getting rid of the Covid stimulus. As Billy Preston sang, “Nothing From Nothing.”

The Atlanta Fed GDPNow Q2 forecast is for … 0% GDP growth despite the massive monetary stimulus and fiscal stimulus from Biden/Pelosi/Schumer.

And yes, the S&P 500 has officially entered a bear market under the leadership of Joe “The Bear” Biden.

So, Biden’s economic agenda (read, just spend more money and inflation declines?) is failing. Hence, The Fed is backing off a bit helping to drive up stock prices.

US markets are addicted to gov.

Four Horsemen! US Consumer Sentiment Plunges To Lowest Level In History (Home Buying Sentiment Falls To Lowest Since 1982) As Inflation And Home Price Growth Rage

What a legacy for Biden/Pelosi/Schumer/Powell, the four horsemen of the inflation apocalypse.

As inflation soars, the University of Michigan Consumer Sentiment index plunged to its lowest level in history.

None of the contributions to consumer sentiment are positive.

The good news? The University of Michigan Buying Conditions for housing only fell to its lowest level since 1982.

Speaking of housing, more than 8 million Americans are late on rent as prices increase.

The four horsemen of the inflation apocalypse.

The DC Stomp! New Home Sales Decline -5.9% YoY, Median Price Rises +42% YoY As Fed Stimulypto Still In Place

The kids running Washington DC are not as sharp as pistols (which they want to take away) when they do the DC stomp.

Thanks to massive Fed monetary stimulus still stalking the housing market, US new home sales rose +10.7% MoM (from April to May), but were down -5.9% YoY (from May 2021 to May 2022) as mortgage rates rose.

Median price of new home sales rose 42% since May 2021, thanks to Fed stimulypto. And Federal government stimulus spending.

Yes, like the predators from the movies, The Fed’s balance sheet is still stalking markets.

Fed Chair Jerome Powell.

Sign Of The Times! US Gasoline Prices Decline To $4.94, Diesel Prices Rise To $5.80 As Recession Fears Mount (Reverse Repos At Fed Hit All-time High)

The talk of a gasoline tax “holiday” out of Washington DC is pure Kabuki theater. It is purely a sign of the times with Biden still trying to blame Putin for rising gasoline prices and inflation and ignoring his anti-fossil fuel policies that helped drive energy prices AND inflation through the roof.

Daily regular gasoline prices have dipped below $5.00 to $4.94 while diesel fuel, the lifeline of the shipping industry, rose slightly to $5.80. I guess the folks shipping food and other goods don’t get a holiday.

Note that the implied Fed target rate has fallen a bit as the probability of a recession increases.

And why are banks stashing so much money at The Fed in the form of reverse repos? Fear of recession, perhaps?

The Biden Administration is settling all kinds of records, and none are good.

Slippin’ Into Darkness! US Mortgage Rates Decline Slightly As Recession Probability Spikes (Will Fed U-turn From Inflation Fighting To Recession Fighting?)

Slippin’ Into Darkness!

Despite what Biden and his muppets say, there is a good chance that the US will slip into recession over the next 24 months. And with that, we are seeing a slight drop in US mortgage rates.

Inflation is surging, and The Fed seems intent on “inflation fighting” but may have to pause that fight the impending recession. This is called a “U-turn” although Powell didn’t mention that is his testimony yesterday.

According to Mortgage News Daily, the 30-year fixed dropped below 6% to 5.88%.

Europe is signaling their u-turn to recession fighting as 10-year sovereign yield have dropped over 10 basis points this morning. Australia and New Zealand are dropping hard as well.

Here is the Federal Reserve’s open market committee deciding on the direction of interest rates … inflation fighting or recession fighting?

WTI Crude Oil Futures Breaks $110 Barrier As Crack Spread UP 535% Under Biden (Diesel Fuel UP 121%)

The US is a movin’ on up to the high side … of energy prices.

Today, WTI crude oil futures broke through the $110 barrier.

The WTI Crude crack spread, the differential between the price of crude oil and petroleum products extracted from it, is up 535% under President “I HATE OIL!” Biden and diesel fuel is up 121%.

WTI crude is up 1% today.

“Crack? I thought crack was something that Hunter did!” – Joe Biden

Mr Freeze! Existing Home Sales Drop -3.39% MoM In May, Median Price Growth At 14.8% YoY, Inventory Rises Slightly As Fed Stimulus Continues

Rising energy prices, rising home prices, rising mortgage rates, declining hope.

But as The Federal Reserve begins to withdraw it Covid stimulus, existing home sales declined -3.39% in May from April.

But like Covid itself, The Fed’s outrageous monetary stimulus is still in place, helping caused median home prices to rise 14.8% YoY. And inventory for sale is rising, but still remains low.

Jointly, Treasury Secretary Yellen and Fed Chair Powell are “Mr Freeze.”

Bitcoin Rallies To $20k As Yellen Confesses That Inflation Will Remain High For 2022 (So, Monetary Tightening ISN’T The Answer??)

US Treasury Secretary and former Federal Reserve Chain, Janet Yellen, admitted on ABC’s This Week that US inflation is “unacceptably high”and prices are likely to stick with consumers through 2022, and that the US economy is likely to slow down.

“We’ve had high inflation so far this year, and that locks in higher inflation for the rest of the year,” she said Sunday on ABC’s “This Week.” 

“I expect the economy to slow,” she said, adding: “But I don’t think a recession at all inevitable.”

US inflation accelerated to 8.6% in May, a fresh 40-year high that signals price pressures are becoming entrenched in the economy. Those figures dashed any hope that inflation was starting to ebb, prompting the Federal Reserve to unleash its biggest interest-rate increase since 1994.

Hey, I thought strangling the US mortgage market and housing markets was supposed to cool the inflation rate, Janet.

On the good news/bad news front, cryptocurrency Bitcoin fell to $17,600 earlier today before rebounding to above $20,000 as the expectation of further Fed rate increases diminished (Yellen admitted the economy is slowing).

Yellen ignored rising mortgage rates which is putting a chokehold on the US housing market.

Hey Janet! So you are admitting that Biden’s energy policies AND massive Congressional spending bills ARE helping to drive prices through the roof and that Fed rate increases won’t tame the savage inflation beast?

Winter Is Coming … For Mortgage Markets! Monthly Mortgage Payments SOAR As Fed Tightens Noose On Economy

We’ve got a line on The Federal Reserve. They don’t seem to care about housing and the mortgage market.

Monthly mortgage payments are soaring as home prices soar AND mortgage rates soar.

Mortgage rates have soared with Fed noose tightening.

Something has to give. Otherwise, winter is coming.

The theme song of The Federal Reserve thinking that rising prices can be tamed by raising rates is “Dear Mr Fantasy.”