All Forum Posts by: Matt Myre

There's effectively no chance that the Fed will cut rates by anything more than 25 bps. Core inflation is barely below 3%, and jobs, while weak (and even weaker now that the data is apparently way off), are not dropping off the cliffs required to justify a 25+ bps drop.

I'd been working on this article for a couple of weeks, but given the economic announcement VP Harris made last Friday, the timing couldn't have been better. I wanted to know if the president has any legitimate levers that they can pull to impact housing. As a student of history and electoral politics, my hypothesis was a flat no, and the research did verify at least most of my assumptions.

However, I could have written a book about this topic, and I really don't think I can answer the question succinctly enough in 2,500 words. Regardless, this article has been trending over the last day, and I've gotten some good feedback, so I figured I'd share it here. Let me know what you all think and if I missed anything that I should have considered.

America is starting to look like a late-stage nation whose citizens enjoy the fruits of the previous generation's struggle but are slowly but surely approaching a catastrophic debt bubble waiting to burst. You're exactly right. We need more, want more, have more, demand more. It's a doom cycle that every major empire has gone through before. Scary stuff, and unfortunately, most Americans are either a) oblivious to the reality staring straight at us or b) think that "American exceptionalism" is enough to buck any trend, even the ones that happen over and over again.  

My early thoughts are that expanding downpayment assistance while mortgage rates decline and still failing to build enough supply will only drive housing prices higher. Meanwhile, investors are being blamed and actively targeted by the federal government.

This is major news and is a step further than the recent rent increase cap plan presented by President Biden earlier this summer.

In all fairness to the unpredictability argument, the Fed had data showing massive spikes of inflation in 2021 while also knowing that the US government had injected trillions of dollars of stimulus into the economy during the pandemic but decided to pass it off as "transitory" due to "supply chain shocks" (not wrong, but wildly overblown). Inflation reached 9% before Powell made consistent moves. The bottom line is that the Fed is always hard to predict despite the data. If they were following the data in the way you're suggesting, then they would have started increasing rates far sooner than March 2022.