After Fed Trims ON RRP Rate by 5 Basis Points on Top of Rate Cut, ON RRPs Plunge to $98 Billion, Lowest since April 2021, -$2.3 Trillion from Peak, on the Way to Zero

by Wolf Richter • Dec 21, 2024 • 33 Comments

QT has only drained ON RRPs so far, but not Reserves, which are still where they’d been when QT started in July 2022. QT has a long way to go.

What Powell Said at the FOMC about Today’s PCE Price Index: “We Still Have Work to Do Though, Is How We’re Looking at it. We Need policy to Remain Restrictive to Get that Work Done”

by Wolf Richter • Dec 20, 2024 • 37 Comments

Inflation is still in services, no progress in 6 months. Another bummer: Durable goods deflation, a contributor to cooling inflation, may be over.

Census Bureau Massively Revises Up Population Growth: +8 Million in 3 Years, +3.3 Million Last Year, Largely due to Immigration. US Population Surges to 340 Million

by Wolf Richter • Dec 19, 2024 • 105 Comments

Total Employment to be substantially revised higher early 2025 when the BLS incorporates these up-revisions into its household survey employment data.

Home Sellers, Home Buyers, and Brokers Getting Used to the “New Normal” Old Normal 6-7% Mortgages?

by Wolf Richter • Dec 19, 2024 • 58 Comments

Existing home sales rise from multi-decade rock-bottom, still -34% from 2021, -22% from 2019. Supply highest for November since 2018, days on market highest since 2019.

Fed Cuts by 25 Basis Points, to 4.25%-4.50%, Sees Only 2 Cuts in 2025, Sees Higher Inflation, Higher “Longer-Run” Rates. QT Continues

by Wolf Richter • Dec 18, 2024 • 246 Comments

Energetic backpedal from the aggressive monster-rate-cut trajectory envisioned by the markets three months ago.

The Fed Needs to Watch Out to Not Throw More Fuel on this Demand: Retail Sales Accelerated Sharply in the 2nd Half

by Wolf Richter • Dec 17, 2024 • 109 Comments

It’s like someone turned on the spigot in July and forgot to turn it off.

Housing Bubble & Bust #1 and #2 as Seen through Employment in Mortgage Lending

by Wolf Richter • Dec 16, 2024 • 83 Comments

Employment at nonbank mortgage lenders collapsed by 37% this time around, to the lowest level since 1997.

The Most Splendid Housing Bubbles in Canada, Nov. 2024: Condo Prices Drop to New 3-Year Low, Single-Family Prices Stable at -17% from Peak in March 2022

by Wolf Richter • Dec 16, 2024 • 38 Comments

By Metro: Toronto, Vancouver, Hamilton, Calgary, Ottawa, Montreal, Quebec City, Halifax, Victoria, Edmonton, Winnipeg.

Treasury Yield Curve Un-Inverts Further on Surging Longer-Term Yields: 10-Year Yield Now Higher than All Shorter Yields. Mortgage Rates Resurge

by Wolf Richter • Dec 14, 2024 • 114 Comments

Fed cut by 75 basis points since September while 10-year Treasury yield rose by 75 basis points to 4.40%, as Bond Market frets about Inflation & Supply.

Money Market Funds, Large CDs, Small CDs, and Total Deposits: Americans’ Huge Piles of Interest-Earning Cash as Rates Drop

by Wolf Richter • Dec 13, 2024 • 48 Comments

Household cash in money market funds jumps to a record but CD balances begin to decline.

The ECB Steps Away from Bond Market Entirely, Speeds Up Bond QT even as it Cut Rates

by Wolf Richter • Dec 13, 2024 • 23 Comments

It already reduced its balance sheet by €2.48 trillion and completed its loan QT to near-zero.

The Most Splendid Housing Bubbles in America, November Update: Prices Drop in All 33 Big Metros, Most in Austin, Tampa, Dallas, San Antonio

by Wolf Richter • Dec 12, 2024 • 136 Comments

19 Metros below 2022 peaks: Austin -22%, San Francisco -10%, Phoenix -9%, San Antonio -8%, Denver -7%, Salt Lake City -6%, Sacramento -6%, Portland -6%, Dallas -6%, Seattle -5%, Honolulu -5%…

PPI, “Core” PPI, “Core Services” PPI Inflation Much Hotter after Whopper Up-Revisions Going Back Months

by Wolf Richter • Dec 12, 2024 • 80 Comments

The problem is in services, which account for 67% of PPI. But goods prices are re-accelerating too. The whole inflation scenario has changed.

Beneath the Skin of CPI Inflation: CPI & “Core” CPI Accelerate Further Month-to-Month, 3-Month Averages Heat Up for 4th Month. Year-over-Year, CPI Accelerates for 2nd Month

by Wolf Richter • Dec 11, 2024 • 64 Comments

On re-spiking motor vehicle prices, jumping food & gasoline prices. But housing inflation backs off.

GM Shuts Down its Misbegotten Robotaxi Money-Pit after Acquiring Cruise in 2016 and then Blowing $10 Billion on It

by Wolf Richter • Dec 10, 2024 • 95 Comments

Cruise was supposed to generate $50 billion in revenues by 2030, according to GM’s former hype, which Wall Street ate up.

Credit-Market Mania Crushed “Yield Spreads” & Risk Premiums, but Corporate & CRE Borrowing Costs Are Still Much Higher

by Wolf Richter • Dec 9, 2024 • 45 Comments

Loosey-goosey financial conditions don’t mean low borrowing costs. They just mean narrow yield spreads.

Used-Vehicle Prices Turn into Inflation Headwind, after Historic 2-Year Plunge Helped Power the “Deceleration” of Core CPI

by Wolf Richter • Dec 7, 2024 • 47 Comments

Prices are rising again, amid tight supply, sharply reduced flow through the used-vehicle pipeline, and strong demand.

Labor Market Doing Fine. The Fed Can be “Careful” with Rate Cuts. Maybe Time for Some Wait-and-See?

by Wolf Richter • Dec 6, 2024 • 73 Comments

Payrolls & wages jump, prior 2 months revised higher, solid bounce-back from Hurricanes and Boeing strike. 3-month average payrolls +173,000!

Fed Balance Sheet QT: -$98 Billion in November, -$2.07 Trillion from Peak, to $6.90 Trillion, Lowest since May 2020

by Wolf Richter • Dec 5, 2024 • 71 Comments

Quantitative Tightening has shed 43% of the assets the Fed had added during pandemic QE. Bank-panic facility BTFP is vanishing.

Everybody Should Get Used to these Mortgage Rates, Says Fannie Mae CEO: Mortgage Rates, 10-Year Treasury Yields, QT, and Spreads

by Wolf Richter • Dec 5, 2024 • 62 Comments

“Current mortgage rates and Fannie Mae’s forecast for 2025 rates are well in line with rates over the past several decades.”