NOT Always Sunny! Philly Fed Business Outlook Falls To -13.7 As Retail Sales Surprise To The Upside (1 Hike Expected At July FOMC Meeting)

Now that I know that the US is building a railroad from the Pacific Coast to the Indian Ocean (according to Resident Joe Negan), I feel so much better. /sarc

On the other hand, The Philadelphia Fed’s Business Outlook index for June fell to -13.7.

On the positive side, retail sales surprised to the upside which would ordinarily trigger more rate hikes from The Fed. +0,3% MoM in May versus -0.2% MoM expected.

Now Fed Funds Futures are pointing to a rate hike at the July FOMC meeting.

Of course, Biden just had his primary opponent in the 2024 Presidential election and charged with document mishandling.

US Mortgage Rates UP 144% Under Biden’s Reign Of Error (Fed Likely To Pause Today But Raise Rates At July Meeting)

Biden’s “reign of error” is horrific. The inflation caused by Biden’s policies, The Federal Reserve and insane Federal spending has caused mortgage rates to soar 144% since Biden took office.

While The Fed is likely to pause today, but Fed Funds are pricing in a July rate hike.

Banks are not going to like another rate hike!!!

Bidenville! US Inflation Cools To 2x Target In May, 26 Straight Months Of Negative Weekly Wage Growth (Core Inflation Still At 5.3% YoY, Yet Fed Will Pause Rate Hikes)

Okay, Joe Biden was generally regarded as the dumbest member of the US Senate and mean-spirited (I won’t repeat podcaster Joe Rogan’s opinion of Biden). Now we realize how brazenly corrupt Biden is (taking bribes from China and Ukraine to influence American poliicies). Not only is Biden an attrocious human being, but his policies have damaged the US middle class terribly thanks to inflation.

Yes, inflation is slowing, Inflation (CPI YoY) slowed to 4% in May, twice The Fed’s target rate of inflation. And core inflation is still raging at 5.3% YoY.

Real weekly wage growth is -0.7% YoY, the 26th straight month of negative wage growth. Great job Biden, Fed and Congress! … NOT!

Rent inflation remains persistently high at 8%, but The Fed is not interested in the suffering of the middle class.

Here is Theo Von’s podcast on Biden.

US Food Prices Are Still Up 8.2% Online (Rent Is Up 8.1% YoY As Americans Pay A Stiff Inflation Tax For Biden/Congress Spending Spree And Fed’s Monetary Stimulypto)

Tomorrow is the Federal government’s inflation report. As it stands today, overall inflation is slowing as M2 Money growth crashed. Core inflation remains persisitently high (white line), rent is still getting worse (orange dotted line at 8.1% YoY. What about food? Online food prices are up 8.2% YoY.

Shopping online is a good place to find cheaper computers and appliances, but grocery prices are still rising at a fast clip.

Prices of consumer goods sold online fell 2.3% in May in the US, the ninth consecutive month of declines and the biggest drop since the pandemic started, according to data from Adobe Inc. That was mainly due to steep decreases in discretionary categories.

Essential items like food, pet products and personal care, however, are seeing persistent inflation. Online grocery prices increased 8.2% from last year — although the pace of inflation has been abating since peaking at 14.3% last September.

Americans have been shifting more of their discretionary purchases to services over the past year, cutting spending on items for the home.

Online prices for appliances were down 7.9% in May from last year, the largest drop in digital-prices data from Adobe going back to 2014. Online prices for computers slumped 16.5% and electronics were down 12%.

The Adobe Digital Price Index was developed with the help of Austan Goolsbee before he became president of the Federal Reserve Bank of Chicago this year. The gauge analyzes one trillion visits to retail sites and more than 100 million items to track price changes.

Yes, Biden and Congress have levied a devastating tax on Americans. Rent and food are two of the largest household expenditures and they are up 8.1-8.,2% YoY.

Welcome To The United Banana Republics Of America! US Debt At $31.8 TRILLION And Growing Fast, Unfunded Liabiliities At $188 TRILLION, Personal Taxes Will Be Rising To Pay For This Outrageous Spending Splurge

Nicolas Maduro of Venezuela must be envious of Joe Biden. I don’t think even Maduro has the stones to have his politiical opponent charged with espionage in the run-up to a Presidential election. Particularly when the US President has been bribed by China and Ukraine and has similiar sensitive document hoarding issues (at least Trump didn’t leave boxes of sensitive documents in a garage like Biden did when he keeps his Chevy Corvette).

So where do we sit today after Biden has signed the debt ceiling increase and massive spending splurge?

First, look at the crashing bank deposit problem. Well, the solution is for The Fed to fire up the money printing press! Keep on printing!

My former colleague at Deutsche Bank, Joe Carson, has a nice writeup entitled “Long-Run Effects of Budget/Debt Deal Are Not Investor-Friendly: Higher Rates and Taxes Are Coming.” Carsons shows that taxes will indeed be going up. And the tax burden is being shifted towards individuals.

And away from corporations.

This not surprising if you have read Nobel Laureate George Stigler’s treastise on regulatory capture. Essentially, big corporations (big media, big tech, big banking, big pharma, big defense, big agriculture, etc.) essentially own Congress, the Biden Administration and Federal regulators. After all, Biden has been bribed with millions of dollars by China and Ukraine and, like a Banana Republic, has is avoiding prosecution and instead prosecuting his political opponent, Trump. Don’t worry, if they get Trump that will indict DeSantis for something.

US debt stands at $31.8 TRILLION with $188 TRILLION in unfunded liabilities (which means higher personal taxes and much more debt).

Babylon Bee: ‘The U.S. Is Not A Banana Republic,’ Says Biden While Showing Off Cool New Uniform

Simply Unafforable! The Fed And Death Of The Starter Home Market (Fed Pause Will Not Help Much)

Starter homes are simply unaffordable.

Treasury Secretary Janet “Too Low For Too Long” Yellen, and former Federal Reserve Chair, is partly responsible for a phenomenon plaguing America: the death of starter homes.

As Mish has discussed, with main markets no longer an option for first-time buyers, Point2 looked at the country’s 100 largest secondary cities for the median price of a starter home and renter households’ median income. Defined as large non-core cities within a metro, these cities used to be fruitful house-hunting grounds for first-time buyers exploring less-expensive options away from main cities. But as it turns out, unaffordability can put a dent in homeownership plans regardless of city type or size.

In 41 of the 100 largest secondary cities in the U.S., renters earn half or less than half of the income they would need to buy a median-priced starter home.
There are no non-core cities in which renters could comfortably make a move toward homeownership: In 10 cities, the necessary income is about triple what they earn.
Would-be buyers in Burbank and Glendale, CA have it worst: They lack 67% of the income they would need in order to make the move from renter to homeowner.
Renters in 9 California cities would need to earn about $100,000 more in order to afford a starter home. Based on the latest renter income figures, starter home prices, and mortgage rates, non-core cities in the LA and San Diego metros are the toughest for first-time homebuyers.
In 15 of the 100 largest secondary cities, renters would need less than 4 months’ worth of extra income to afford the transition to owning a starter home.
Homeownership is within reach in Independence, MO, and Broken Arrow, OK. Those who dream of owning here would need less than one month’s worth of extra income to afford a starter home.

California Tops the List of Worst Places to Look

California has the dubious distinction of having the top least affordable starter home cities.

A starter home, according to the Census Department is priced in the bottom third of homes in the area.

Pomona, CA, is in fourteenth place. The average renter in Pomona makes $49,000 a year and needs to get to $121,000 a year. That’s nearly 2.5 times current salary.

In Burbank, CA, the average renter makes $63,000 year an needs to get to $193,000. That’s over 3 times current salary.

Within Grasp

In no market can the average renter make the plunge.

But in Independence, Missouri, or Broken Arrow, Oklahoma, the average renter is respectively just 2% and 5% short of the amount needed for a starter home

Not Shocking

None of this is shocking. It matches one one should expect looking at Case-Shiller home prices and mortgage rates.

Case-Shiller Home Price Index National and Top 10 2023-03

The Fed wanted to produce inflation and it did. But for years the Fed did not even see the inflation because the manifestation of inflation was in asset prices, not the price of consumer goods.

Case-Shiller Top City Home Prices Decline From Year Ago for the First Time Since May 2012

CS National, Top 10 Metro, CPI, OER 2023-03

Housing starts, like mortgage purchase demand, remains depressed compared to the housing bubble of the 2000s.

Now, will The anticipated Fed pause in rate hiking help? Not likely. The Fed still has over $8 trillion in monetary stimulus chasing assets. Too much Stimulypto.

Janet “Bubbles” Yellen probaby listened to too much Don Ho.

Bidenville Mortgage Depot! US Mortgage Purchase Demand Down -27% Since Last Year, Refi Demand Down -42% (Bidenflation, Stalling Economy = Bad News For Mortgage Market)

Welcome to the Bidenville Mortgage Depot! Where Bidenflation (caused by idiotic energy policies, crazy Fed money printing and insane Federal spending) has caused The Fed to raise rates crushing the US mortgage market.

Mortgage applications decreased 1.4 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending June 2, 2023. This week’s results include an adjustment for the Memorial Day holiday.

The Market Composite Index, a measure of mortgage loan application volume, decreased 1.4 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 12 percent compared with the previous week. The Refinance Index decreased 1 percent from the previous week and was 42 percent lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 2 percent from one week earlier. The unadjusted Purchase Index decreased 13 percent compared with the previous week and was 27 percent lower than the same week one year ago.

The rest of the story.

The East Palestine Ohio train wreck is symbolic of Biden’s economic programs. I don’t think the Vacationer in Chief (40% of time as President has been on vacation) has been there yet.

Biden’s Economy! ISM Manufacturing In May Falls To 46.9, 7th Straight Month Of Contraction (McCarthy Surrenders To Biden And Allows 2 Years Of Uncontrolled Spending And Debt)

Another day under Biden/Yellen.

Last night, “Republicans” joined Democrats to allow unlimited Federal spending and debt for the next two years. Way to go “Benedict McCarthy”!

But today, we saw that ISM Manufacturing printed at 46.9 for May, the 7th consecutive month of contraction.

Meanwhile, the Biden family twists the night away while Americans are ravished by inflation caused by bad energy policies and runaway Federal spending.

The new flag of the National Republican Party!

Biden’s Economy: Challenger Job Cuts Soar 286.7% YoY In May As M2 Money Growth Collapses

So much for Biden’s “miracle economy.” Challenger jobs cuts report is out for May and job cuts soared 286.7% year-over-year (YoY). As M2 Money growth crashes.

Land Of Confusion! US Mortgage Demand Drops 3.7% From Previous Week, Under Biden: Mortgage Purchase Demand Down -44%, Refi Demand Down -87%, Mortgage Rates UP 106%

Under Biden, the US economy is a land of confusion. Under Biden’s Reign of Error, Mortgage Purchase Demand is down -44%, Refi Demand is down -87%, and Mortgage Rates are UP 106%.

Mortgage applications (demand) decreased 3.7 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending May 26, 2023.

The Market Composite Index, a measure of mortgage loan application volume, decreased 3.7 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 5 percent compared with the previous week. The Refinance Index decreased 7 percent from the previous week and was 45 percent lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 3 percent from one week earlier. The unadjusted Purchase Index decreased 4 percent compared with the previous week and was 31 percent lower than the same week one year ago.

Here is the rest of the story.

1% down payment mortgages when home prices are falling? Truly, a land of economic confusion under Country Joe.