Escape From LA! US Home Prices “Cool” To 15.77% YoY In July As Fed Tightens (Miami And Tampa FL Only Metro Areas Over 30% YoY) 12 Of 20 Metro Areas Experienced NEGATIVE Growth From June To July

Welcome to DeSantisville! Miami and Tampa Florida are the only metro areas in the nation (at least of the top 20 metro areas) growing at >30% growth in home prices.

But at the national level, the Case-Shiller National home price index “cooled” to 15.77% growth YoY as The Fed continues to tighten.

My former home, Phoenix AZ, finally is no longer the fastest growing metro area in terms of home prices, relinquishing the crown to Miami and Tampa FL.

It almost seems that people are trying to escape the mess Gavin Newsome made in California and are escaping to Arizona, Nevada, Florida and Texas. But note that all 20 metro areas are positive in growth YoY, but 12 of the top 20 metro areas experienced NEGATIVE growth from June to July.

Any questions as to whether The Fed is killing the housing and mortgage markets??

On a different note, we see all hell breaking out in Great Britain. Like the US, Great Britain’s inflation is off the charts and the Bank of England is scared about the Pound getting pounded with BofE tightening.

Is FLA governor Ron DeSantis actually Snake Pliskin??

Why Is Everything I Consume Going Up By >10% When The Inflation Rate Is “Only” 6.3% YoY? (Under Biden, Gasoline Is UP 55%, Foodstuffs UP 47%, Electricity UP 957%, Rents UP 12.5% YoY)

According to the BLS, US core inflation is 6.3% and headline inflation is 8.3% YoY. But everything I consume seems to be going up at a much faster rate?

Under Biden, regular gasoline price is UP 55%, CRB Foodstuffs UP 47%, rents UP 12.5% YoY and electricity is UP 957%.

And as The Fed continues to signal monetary tightening, the spread between 30Y FNCL Par Coupon and the 10-year Treasury yield keeps growing.

In case you watched the Buffalo Bills play the Miami Dolphins yesterday, you may remember this punt by the Dolphins. It almost perfectly represents what The Federal Reserve and Biden Administration are doing to the American middle class and low-wage workers.

More On Worst Bond Bubble Burst Since 1949! US Yield Curve Inverts To Lowest Since 2000 (US Mortgage Rate Climbs To 6.59%, UP 129% Under Biden)

And I thought the Washington Commanders QB Carson Wentz getting sacked nine times in a game against his former team was bad!

We start the week with another chapter of “The Worst Bond Bubble Burst Since 1949.” This time its the US Treasury 10yr-2yr yield curve inverted to its lowest level since 2000.

Then across the pond, the UK sovereign yield curve is also inverted. But this curve is only inverted to 2008 levels of The Great Recession. The UK 2-year sovereign yield is up over 50 basis points this morning.

Then we have the US Dollar Swaps curve (green line), steeply UPWARD sloping until 6 months, then declining. The same goes for the US Treasury Actives curve (blue line), except that is it steeply upward sloping out to 1 year then begins declining.

And then we have the Bankrate 30-year mortgage rate rising to 6.59%, up 129% since Biden was sworn-in as President.

Also declining since Powell unleashed his monetary Panzers on the economy and financial markets are 1) agency MBS and 2) S&P 500 index.

The stock market’s value is down $7.6 trillion since Biden took office.

When I saw Carson Wentz of the Washington Commanders getting sacked 9 times, I thought maybe Prince Harry was playing instead. Or maybe Meghan Markle.

Price Harry is on the left, Commanders QB Carson Wentz is on the right.

US Mortgage Payments Up 45.5% YoY Thanks To Fed Tightening Caused By Bidenflation

Biden’s green energy policies (limiting supply) caused a tremendous surge in energy prices and food prices (one has to pay to get food shipped!). But in order for The Fed to cool inflation, they are in the process of tightening their loose monetary policy since late 2008.

One of the consequences (intended or unintended) is that as mortgage rose, homebuyer mortgage payments rose 45.5% YoY.

We’re Going Down! US Treasury 10yr-2yr Yield Curve Inverts To -54.4 BPS, Lowest Since Volcker’s War On Inflation

We’re going down!

As The Federal Reserve battles inflation (caused by excessive monetary stimulus since 2008), Biden’s green energy policies and excess Federal government spending), we can see that the US Treasury 10yr-2yr yield curve has inverted to -54.4 basis points, the lowest since 1982 after Fed Chair Paul Volcker’s war on inflation.

The US Treasury 10yr-2yr yield curve typically inverts (or goes below zero) several months prior to a recession and is most inverted since 1982.

Fed Funds futures data points to the target rate rising to 4.613% by the May ’23 FOMC meeting … then declining.

Since this is rather miserable news for the economy, I will now play my favorite Bruce Springsteen tune, Sherry Darling.

At least the Dow Jones mini-me futures are up this morning.

The US Dollar/Euro cross currency is rising with Fed tightening.

US Treasury Yield Curve Inverts Most Since 1982 And Fed Chair Volcker (S&P 500 Declines -1.8% On Fed Announcement)

Well, ain’t this a kick in the head!

The US Treasury yield curve inverted by the most since 1982 and Fed Chair Paul Volcker. Of course, inverted yield curves occurs before recessions.

Then we have the S&P 500 index dropping -1.8% today.

Fed Raises Target Rate By 75 BPS As Recession Looms, DOT Plots Signals Rates Rising To 4.625% In 2023 Then Reverting Back To 2.5% (Mortgage Rate Rises To 6.38%)

As expected, The Federal Reserve raise their target rate by 75 basis points today. While that sounds like an inflation (blue line)-crushing rate hike, look at the slowly shrinking Fed Balance Sheet (gold line).

Of course, the risk of a recession (dark blue line) is on the increase.

Given the increasing likelihood of a recession, The FOMC’s Dots Project shows The Fed’s target rate increasing to 4.625% in 2023, then gradually declining to 2.5% in the long run.

Fed Funds Futures data points to a peak in May 2023.

And with The Fed’s tighten-up, Bankrate’s 30yr mortgage rate rose to 6.38%.

Why is The Fed so slow to reduce its prodigious balance sheet if they REALLY wanted to fight inflation? So we can’t really say that The Fed has been turned loose to fight inflation.

Yikes! German PPI Soars To 45.8% YoY (The New Russian Front?)

The war in Ukraine is still going on and Russia is punishing Germany in terms of energy supply.

It is almost as if the Ukraine war is the NEW Russian front for Germany. The German Producer Price Index YoY surged to 45.8% YoY.

German buyers on Monday briefly reserved capacity to receive Russian gas via the Nord Stream 1 pipeline for the first time since the line was shut down three weeks ago, German data showed, but this was later revised and no gas has been flowing.

It was not immediately clear why buyers had submitted requests for capacity when Russia has given no indication since it shut the line that it would restart any time soon.

Russia, which had supplied about 40% of the European Union’s gas before the Ukraine conflict, has said it closed the pipeline because Western sanctions hindered operations. European politicians say that is a pretext and accuse Moscow of using energy as a weapon.

But German inflation, using CPI, is only 7.9%. Something has to give!

On the western front (US), the US Treasury 10yr yield is up +10.2 bps. And sovereign yields in Europe are all above 10 bps.

The Core! US 30y Mortgage Rate Rises (US Futures Fall as Traders Eye Supersized Fed Hike)

Even Obama’s economic advisor, Larry Summers, is wondering why Biden won’t allow pipelines to be build to reduce energy prices and reduce inflation.

Having said that, US mortgage rates are now the highest since 2008 and continue to rise with the expectation of more Fed rate hikes this year. Even core inflation is on the rise motivating The Fed to do more tightening since they aren’t receiving any help from Biden on energy or Congress in terms of massive spending of our money.

Mortgage payments for a median existing home in the US is back to the mid-1980s.

Data from Fed Funds futures implies that The Fed will raise their target rate to 4.50% by March 2023, then slowly lower rates.

Futures are down with the prospect of a 75 basis point bump in rates tomorrow. The Dow Jone Mini is down -167 points.

Powell’s Famous Chili! National Association of Home Builders Market Index Falls More Than Expected To 46 As Fed Tightens Monetary Noose (Lowest Since 2012, Excluding Covid Crash)

The National Association of Home Builders market index fell more than expected in September to 46, the lowest reading since 2012 (if I exclude the Covid economic shutdown).

Note that the NAHB market index is declining along with at the increase in the 30yr mortgage rate.