Trump’s Economy In Q2 Growing At 3.5% As Fed Keeps On Printing!

The Fed’s themesong: Keep on printing!

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2025 is 3.5 percent on June 17, down from 3.8 percent on June 9. After recent releases from the US Census Bureau, the US Bureau of Labor Statistics, the Federal Reserve Board of Governors, and the Treasury’s Bureau of the Fiscal Service, the nowcasts of second-quarter real personal consumption expenditures growth and second-quarter real government expenditures growth decreased from 2.5 percent and 2.3 percent, respectively, to 1.9 percent and 2.1 percent, while the nowcast of second-quarter real gross private domestic investment growth increased from -1.9 percent to -1.4 percent.

GDP growth corresponds to Fed money printing.

Here is the breakdown. True, real GDP growth has been slowing over June.

Simply Unaffordable? US Homebuilder Confidence Tumbles Near 13-Year-Lows Due To Post-Covid Home Price Gains (And Higher Mortgage Rates)

Thanks a lot Fed! Home prices rose dramatically after Covid as The Fed printed billions of dollar of currency (M2). Making housing unaffordable for much of America.

As a result of higher mortgage rates and higher home prices, homebuilder confidence is at a 13 year low (back to 2012).

Housing is simply unaffordable thanks to bad housing policies and The Fed.

Inflation Keeps Falling, But Shelter Inflation At 3.86% YoY (Core Inflation Declines To 2.787% YoY)

Gimme (affordable) shelter!

May Rent inflation 3.81% YoY, down from 3.98% in April, lowest since Jan 2022.

May Shelter inflation 3.86% YoY, down from 3.99% in April, lowest since Nov 2021

In general, CPI increased 0.1% MoM after rising 0.2 percent in April; Over the last 12 months, the all items index increased 2.4 percent before seasonal adjustment. The index for all items less food and energy rose 0.1% in May, following a 0.2% increase in April.

The index for shelter rose 0.3% in May and was the primary factor in the all items monthly increase. The food index increased 0.3% as both of its major components, the index for food at home and the index for food away from home also rose 0.3% in May.

In contrast, the energy index declined 1.0% in May as the gasoline index fell over the month.

Indexes that increased over the month include medical care, motor vehicle insurance, household furnishings and operations, personal care, and education.

The indexes for airline fares, used cars and trucks, new vehicles, and apparel were among the major indexes that decreased in May.

Core inflation is up 2.787% YoY, considerably lower than under Autopen Biden.

M2 Money is currently growing at 4.3%.

Into The Mystic? Mortgage Applications Decrease 3.9% In Latest MBA Weekly Survey (Purchase Apps Drop 15%)

Mortgage applications decreased 3.9 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending May 30, 2025. This week’s results included an adjustment for the Memorial Day holiday.

The Market Composite Index, a measure of mortgage loan application volume, decreased 3.9 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 15 percent compared with the previous week. The seasonally adjusted Purchase Index decreased 4 percent from one week earlier. The unadjusted Purchase Index decreased 15 percent compared with the previous week and was 18 percent higher than the same week one year ago.

The Refinance Index decreased 4 percent from the previous week and was 42 percent higher than the same week one year ago.

Most mortgage rates moved lower last week, with the 30-year fixed rate declining to 6.92 percent and staying in the 6.8 to 7 percent range since April.

Biden/Harris/Yellen’s gross economic mismanagement reminds me of the song “Into The Mystic.” Because it requires a mystic to determine WHO was running the Biden/Harris adminstration and using the autopen.

CC Rider? MBS Current Coupon (CC) Spreads Widen From Treasuries, Gold, Silver And Copper UP

CC Rider! 30Y MBC Current Coupon (CC) spreads is widening.

And metals are along for the ride! Gold and silver are soaring!

What about Copper?

Glad All Over! AI Contributes Massive Amount To GDP Growth As Median Home Price Growth Contracts

I am glad all over … because the AI boom is delivering a record contribtion to US GDP.

And US home prices are contracting making housing more affordable.

I don’t care what you did when you lived in Fort Worth, but at least home prices are contracting.

Pending Home Sales Remain In The House Latitudes (Homebuilder Confidence At 34)

Its like Joe Biden and his bonehead advisors are still gumming up the housing market. Pending home sales in April remains in the house latitudes.

NAHB home builder confidence remains below 50 at 34.

Is the music over for the housing market? High housing prices, high mortgage rates, restrictive zoning all hinder markets.

30Y Treasury Yield Headed Towards Highest Since 2007 (US Yield Curve Significantly Steeper Than Under Biden)

US 30y bond yields are heading toward their highest level since 2007.

The yield curve has finally normalized!

And significantly steeper in 2025.

Later and shallower rate cuts are being priced.

Mortgage Applications Increased 11% From Preceding Week, Fed Will Remain On Hold (Purchase Apps Up 12%)

The Fed can help, but won’t. We are still struggling to recover from Biden’s cockeyed management of the economy,

Mortgage applications increased 11.0 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending May 2, 2025.

The Market Composite Index, a measure of mortgage loan application volume, increased 11.0 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 12 percent compared with the previous week. The seasonally adjusted Purchase Index increased 11 percent from one week earlier. The unadjusted Purchase Index increased 12 percent compared with the previous week and was 13 percent higher than the same week one year ago.

The Refinance Index increased 11 percent from the previous week and was 51 percent higher than the same week one year ago.

The economic news last week included a negative reading for first-quarter GDP growth and further signs of contraction in the manufacturing sector, mixed with a solid employment report for April. The net impact on mortgage rates was mostly downward but just back to levels from early April. The 30-year fixed rate declined to 6.84 percent.

But there will be no rate cuts today from The Fed.

Mortgage Applications Drop 4.2% From Previous Week (Agency MBS Market Shrank In April)

Money, money!

Mortgage applications decreased 4.2 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending April 25, 2025.

The Market Composite Index, a measure of mortgage loan application volume, decreased 4.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 4 percent compared with the previous week. The seasonally adjusted Purchase Index decreased 4 percent from one week earlier. The unadjusted Purchase Index decreased 3 percent compared with the previous week and was 3 percent higher than the same week one year ago.