Should Trump Fire Powell? YES (Fed Hasn’t Removed The Covid Stimulus And Should, Rates Too High)

Should President Trump fire Fed Chair Jerome Powell and replace his with someone else like Treasury Secretary Scott Bessent? The answer is … YES!

Why? First, there was a massive response to the Covid outbreak in 2020. And the monetary stimulus (aka, stimulypto) has never been removed.

The Fed Funds Target Rate (upper bound) remains high at 4.50% and M2 Money supply is $21.8 TRILLION.

Second, The Fed could help reduce the interest paid on the massive Federal debt load when the debt if refinanced.

The US Treasury yield curve tends to follow anticipated Fed moves.

Of course, The Fed should be abolished. But a step in the right direction would be to fire “Foul Powell” who is on the prowl.

Fed Chair Jerome Powell.

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%.

CMBS Office Serious Delinquencies At 10.59% As US Treasury Yield Curve Steepens

I’ll feel a whole lot better when CMBS office serious delinquenies get below 10%. But serious delinquencies on office space is currently at 10.59%.

The US Treasury yield curve is steepening.

Office delinquencies are likely to rise in Los Angeles as Governor Newsom sits on his greasy hands as LA burns.

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.

Core PCE Fell In April To Lowest Since April 2021, +2.5% YoY (Fed M2 Money Printing UP 4.3% YoY)

The Fed’s favorite inflation indicator – Core PCE – fell once again in April to its lowest since April 2021 at +2.5% YoY.

And The Fed keeps on printing money!

Supercore inflation is down to -0.023 MoM.

The Fed is thinking that they can help.

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.

New Home FHA Mortgage Share Surges As Debt-To-Income Ratios Surge (New-home Loan Sizes Fell To 2021 Levels)

The not shocking news out of DC: The ‘Big, Beautiful Bill’ Will “Massively” Increase Near-Term Deficits, Add $5 Trillion In Debt. The surprising news? New home FHA Mortgage Share has surged!

On the not surprising news front: FHA debt-to-income ratios have surged (the surge started under Biden).

New-home loan sizes have fallen to 2021 levels.

Moody’s Downgrades USA Credit Rating From Aaa (M2 Money UP 40% Since Covid, Public Debt UP 56%, US CDS Down Near Greek Levels!)

Now you know why Trump is so eager to cut wasteful spending! The real mystery is why Democrats and RINOs are so determined to continue wasteful spending and not cut taxes.

Trump inherited a fiscal disaster from Biden and Congress. Not to mention The Federal Reserve. Credit default swaps (CDS) for the USA are near Greece (and China) levels.