They’d piled into the new “risk sharing RMBS bonds” issued by Fannie and Freddie. Wall Street provided 80% leverage. Buying frenzy ensued. But it didn’t last long.
Fisher reports from inside the FOMC: it’s getting more hawkish and will hike interest rates sooner than expected. Markets are in denial. Not going to be pretty.
Investors’ forecasts of rate hikes are well below those by Fed governors. “And it wouldn’t be good” if the gap gets closed “with great rapidity,” frets Fed Governor Lacker.
by Wolf Richter • • Comments Off on Yellen Warns Investors
Yellen pokes at bubbles in momentum stocks, leveraged loans, threatens to end ZIRP sooner, more rapidly “than currently envisioned.” Fasten your seatbelts.
Buyers from China are the most prolific, spending 72% more than a year ago! On expensive homes. They benefit from the devaluation of the dollar – according to the NAR – and are desperate to get their money out of China.
