Alarm! US Pending Home Sales In April Decline -11.5% YoY (Down -3.9% MoM (From March)

US pending homes sales in April tanked -11.5% YoY and down -3.9% MoM which was greater than expected.

Not really surprising when you see that REAL home prices are growing at an 11.55% YoY clip while REAL hourly earnings are declining at a -2.8% YoY pace.

Do you feel like I do with Bidenflation crushing my check book and The Fed crushing my hopes for an affordable home.

US Q1 GDP Forecast -1.3%, Atlanta Fed’s GDPNow Q2 Tracker Only +1.8% (M2 Money Velocity Remains Near All-time Low)

The US Q1 GDP report is due out tomorrow morning. The forecast is for -1.3% decline in GDP.

The Atlanta Fed GDPNow real-time GDP tracker is for 1.806% for Q2. If this holds, then recession fears will diminish.

Even though the US may avoid consecutive negative GDP quarters, M2 Money Velocity (GDP/M2 Money) got crushed by The Fed’s reaction to Covid back in 2020.

Talk about a bad return on “the people’s money”.

AEI’s April Home Price Index UP 17.3% YoY As The Fed And “Slowhand” Powell Keep Monetary Stimulus In Place (Bostic Talking About A Pause?)

All I can say is “Wow.” Tobias Peter and Ed Pinto of the American Enterprise Institute (AEI) released their April housing report and it was a doozy. The AEI’s home price appreciation index came in at a blood curdling 17.3% YoY.

The reason why home prices are still raging at 17.3% YoY? The Fed’s monetary stimulypto is STILL in place! The Fed’s balance sheet (green line) is still staggering, and The Fed Funds target rate (white line) is a measly 1%.

Atlanta Fed President Raphael Bostic is talking about a pause in Fed tightening. Which they haven’t paused yet.

Fed Chair Jerome Powell is really “slowhand,” not Eric Clapton. Bostic is now a member of The Fed’s “Slowhand” strategy.

Slowing? US Closed House Sales Down -9.50% YoY As Mortgage Rates Rise On Fed Tightening (New Listings Down -5.7% YoY)

US home prices were growing at a near 20% YoY rate for the latest Case-Shiller National home price index report. But mortgage rates have soaring like a SpaceX missile shot.

The result? Closed sales for April 2022 are down -9.5% YoY.

Of course, I am moving to one of the metro areas in the USA where closed sales fell only -1.10% YoY in April: Columbus Ohio. I should move to San Diego CA where closed sales fell -21.4% YoY.

Of course, the US still suffers from lack of available inventory for sale.

April new listings are down -5.7% YoY. Columbus Ohio didn’t change from April ’21. San Diego is down -18.4% YoY for new listings.

Rising mortgage rates? Inflation? What a total fiasco.

Here Comes The Night! US Inflation Rate Rising, Expected Growth Declining (10Y Treasury Yield Down, US Equities Down >-1%)

Here comes the night!

The US economy us approaching recession as inflation soars and expected growth declines.

Food and energy prices are soaring, hitting middle class and low-wage households like a hammer. While the headline inflation rate is 8.3% YoY, food is up 63% under Biden and gasoline is up 92%.

The 10-year Treasury note yield is down today, which bodes well for 30-year mortgage rates.

The Dow, S&P 500 and NASDAQ are all down over -1% today.

Baby please don’t go! Down the economic drain.

Inflation Fightin’ Fed? Fed Can’t Fight Food And Energy Inflation, But They Can Crash The Housing Market (To Tame Total Inflation, Fed Would Have To Raise Rates To 21.38%!)

Inflation Fightin’ Fed?

Kansas City Fed President Esther George said The Fed isn’t focused on impact of rates on stocks (or pension funds, apparently).

The inflation that is crushing Americans is due to energy and food price increases. That is, the non-core inflation. Under Biden, food is up 63%, gasoline is up 92% and diesel prices are up 112%. But The Fed doesn’t consider food and energy prices, per se.

If we look at the Taylor Rule considering fighting inflation including food and energy, The Fed would have to raise their target rate to … 21.38%.

Now, The Fed can clearly cool-off the housing market by raising rates. In fact, my fear is that they go too far and crash the housing market. The Fed will NEVER get to 20% again like we last saw under Volcker in 1981. 20% rates certainly cooled home prices back then and Fed rate hikes helped crash the housing market in 2008.

So, when The Fed says they want to be the inflation-fightin’ Fed, we must be aware what The Fed can and cannot do. They can’t tame the inflation beast in the form of food and energy prices (unless they crash the economy), but they can crush home prices.

Medusa Touch! Goldman’s Blankfein Warns Of Recession, Fed Reverse Repos Soar With Inflation, Stock Futures Down While S&P 500 Forward 12-Month P/E Ratio Falls To Pre-Covid (2016) Levels

Goldman Sachs Senior Chairman Lloyd Blankfein urged companies and consumers to gird for a US recession, saying it’s a “very, very high risk.”

I am not surprised. Take a look at The Fed’s Overnight Reverse Repo operations. As inflation surged in 2021 and 2022, banks are parking more funds at The Fed. Fear?

We are seeing the S&P 500 futures down today after a nice rally on Friday. The &P 500 forward 12-month P/E ratio is back to pre-Covid, pre Federal spending surge, pre Fed monetary Stimulypto of 2016.

Goldman Sachs see the 10-year Treasury yield rising to 3.3%. That bodes ill for 30-year mortgage rates, perhaps push mortgage rates up another 40 basis points to 5.80%.

And NASDAQ is having its worst year since 2008.

Its The Medusa Touch of Big Government.

Dark Night! Consumer Sentiment And Home Buying Sentiment Plunge With Bidenflation And Fed Monetary Tightening

A picture is worth a thousand words.

Nothing has been the same since Covid and The Federal Reserve’s massive overreaction to the government shutdowns of the economy.

Notice how the University of Michigan Consumer Sentiment Index (white line) has plunged since Covid and the ensuing rise in inflation. University of Michigan’s Buying Conditions for Houses has also plunged to new depths.

Yes, Bidenflation is just killing us.

Rising inflation (highest in 40 years) and hottest home price bubble (even hotter than the infamous housing bubble of 2005-2007) AND rising mortgage rates have placed a damper on home buying sentiment.

The theme song for the Biden economy is The Blasters’ Dark Night.

Meanwhile, the middle class is left with leftovers.

Good News! Flexible Price Inflation Cools To … 20%, Export Prices Cool To 18% YoY As Jerome “Slowhand” Powell Reappointed As Fed Chairman (Taylor Rule Suggests Fed Rate Of 13.89%)

The US Senate yesterday confirmed the reappointment of Jerome “Slowhand” Powell as Federal Reserve Chairman.

The good news? Atlanta Fed’s Flexible CPI YoY cooled to 20% in April. The bad news? Flexible prices are still growing at 20% while wages are growing at 5.5% YoY.

On the export front, export prices are cooling and were at 18% YoY in April, down slightly from March. Import prices cooled to 12% YoY as The Federal Reserve has slowed asset purchases.

I would have preferred President Biden appoint a serious Federal Reserve Chairman liked Stanford University’s John Taylor (of Taylor Rule fame). In his honor, here is the Mankin version of the Taylor Rule which calls for a Fed Funds Target Rate of 13.89% while the current Fed Funds Target Rate under Powell and the Gang is … 1%.

Call it the Powell Boogie. At a very slow speed.

Powell is indeed “Slowhand.”

Freddie Mac 30Y Mortgage Rate Skyrockets To 5.30% (Feddie And The Dreamers?)

The Freddie Mac 30-year mortgage rate is rising faster than a SpaceX moonshot!

I’m telling your now that The Fed is killing the dreams of millions of Americans by pricing them out of the housing market. Home price growth is lethal as is the increase in mortgage rates.

Do The Feddy!