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☆ Why the struggles of mid-sized US banks could be bad news for the Main Street economy
▼ + stars: | 2023-03-28 | by ( Carla Mozée | ) www.businessinsider.com time to read: +6 min

Households and businesses may find it harder to get loans from regional banks as people pull deposits from those lenders. "The greatest vulnerabilities with respect to credit creation going forward lie with non-mortgage bank lending to households and mortgage bank lending for non-financial non-corporate businesses," JPMorgan said. Regional banks are "very important" to the financial system, CFRA's Yokum said. Regional banks can potentially give better service, more customized products, potentially higher deposit rates," he said. Some hefty figures illustrate the "disproportionately large" role small banks hold in lending in the US.

☆ Bank credit is the life blood of small businesses, says Pantheon's Sheperdson
▼ + stars: | 2023-03-27 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailBank credit is the life blood of small businesses, says Pantheon's SheperdsonIan Shepherdson, founder and chief economist of Pantheon Macroeconomics, joins 'Squawk Box' to discuss how close the bank crisis has brought the U.S. closer to a recession, why this economy is in a credit crunch, and more.

☆ Real-estate investing in a down market: Strategies to use, how far home prices will fall, cities where prices are falling the most, which markets to invest in, and more
▼ + stars: | 2023-02-09 | by ( William Edwards | ) www.businessinsider.com time to read: +6 min

That's bad news for current real-estate investors, and probably good news for prospective ones. On the other hand, it's potentially good news for prospective real-estate investors who have been sitting on the sidelines waiting for better deals. Below is a list of Insider stories to help navigate the current real-estate investing landscape as prices fall. They see US home prices falling another 6% in 2023, putting peak-to-trough declines at around 10%. Justin Sullivan / Getty ImagesOne of the most common financing strategies real-estate investors use to build up a portfolio is the BRRRR method: buy, rehab, rent, refinance, repeat.

☆ A chief economist who called the 2008 housing bubble says home prices will fall another 15% over the next year as they remain too disconnected from buyer incomes and the supply of homes on the market
▼ + stars: | 2023-02-06 | by ( William Edwards | ) www.businessinsider.com time to read: +4 min

Central to their call is the fact that homes remain vastly unaffordable. Homes remain near their most unaffordable levels since the early 1980s, according to the National Association of Realtors' Housing Affordability Index. Home prices fall when supply outpaces demand. "New home sales remain prone to slump suddenly if the upward trend in existing home supply continues," Clancy said. KMPG economists say prices could fall as much as 20% in 2023, while Goldman Sachs and Morgan Stanley say prices will fall another 6.1% and 4%, respectively.

☆ Markets may be taking the wrong read from January's shocking jobs report
▼ + stars: | 2023-02-06 | by ( Jeff Cox | ) www.cnbc.com time to read: +5 min

"The resounding strength of January employment report does not change our view of the labor market. Significant imbalances remain in the labor market due to too much excess demand and limited labor market slack," added Michael Gapen, chief U.S. economist at Bank of America. That's because they see the jobs report gain of 517,000 as a potential impetus to push the Fed into more aggressive interest rate hikes. He thinks future months will show a slowing labor market that will force the Fed into halting its hikes. "From a data-dependency perspective, the strength of the labor market suggests there might be need to continue to raise interest rates."

☆ Recession 2023: Jerome Powell's Legacy Will Dictate Inflation, Stock Market, Economy
▼ + stars: | 2023-01-30 | by ( William Edwards | ) www.businessinsider.com time to read: +15 min

This obsession with controlling inflation — and potentially causing serious pain for average Americans — is driven by one major factor: legacy. High inflation eats away at consumers' purchasing power, and persistent inflation seeps into expectations for price and wage adjustments, which further fuel inflation. What's more, the full impact of the Fed's rate hikes have yet to hit. Legacy actsThere are signs that certain Fed officials are ready to dial back on the inflation fight. And navigating such a tricky economy — without throwing hundreds of thousands of Americans out of work — could cement Powell's legacy.

☆ Investor skepticism grows on Fed reaching rate goal, says Pantheon's Ian Shepherdson
▼ + stars: | 2023-01-13 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailInvestor skepticism grows on Fed reaching rate goal, says Pantheon's Ian ShepherdsonIan Shepherdson, Pantheon Macroeconomics, joins 'The Exchange' to discuss the Fed, rate hikes and the economy.

☆ House prices might plunge 20% in the hottest US markets - and the slump could hammer the wider economy, top investor says
▼ + stars: | 2022-11-17 | by ( Theron Mohamed | ) www.businessinsider.com time to read: +3 min

Home prices could tumble 20% in some of the hottest US markets, top investor Peter Boockvar said. He cited the surge in prices during the pandemic, and soaring mortgage rates pricing out buyers. The Bleakley Advisory boss warned a housing slump could hit consumer spending and the wider economy. "It's an extraordinary rise, and now you have 7% mortgage rates, which are 15-year highs," he said. Paul Krugman, a Nobel Prize-winning economist, has also predicted a housing slump.

That came on the heels of last week's report that October consumer prices rose less than anticipated, and Fed officials have signaled they are likely done with the three-quarter-point rate increases approved at the central bank's last four meetings. "Tech companies may have over-extrapolated the rapid growth they experienced during the pandemic and are now correcting for over-hiring," the Goldman economists wrote. Job growth through October remained strong but was moderating from its pre-pandemic highs, and Fed officials said they saw some initial signs that wage growth was beginning to cool. Curbing demand is one aim of Fed rate increases that have come at the fastest pace in 40 years on the expectation that less consumption will translate into less inflation. "You'd actually expect more competitive pressure to start bringing those costs down," Fed Vice Chair Lael Brainard said Monday at a Bloomberg event.

The Producer Price Index measures inflation at the firm level, showing the change in prices paid for the supplies, materials and services that businesses use, and for the final goods that retailers resell. Prices for final goods less volatile commodities and shipping costs rose 0.2% in October, continuing a slow pace for those "core" items. The model shows the Fed rate now rising only to 4.75%-5.00% in March, whereas a week ago it showed the Fed rate likely exceeding 5% by then. The breakeven-inflation rate on the 5-year Treasury Inflation Protected Security slid to the lowest in a month at 2.38%. Shepherdson has been focused on the producer price index as more important than usual because of market distortions driven by the pandemic, and said that a drop in the index's margin components would influence the direction of consumer prices going forward.

☆ A 'once in a lifetime opportunity, bigger than 2008': A real estate investor who owns 109 properties shares 5 tips to take advantage of a coming 20% correction in the housing market
▼ + stars: | 2022-11-10 | by ( Laila Maidan | ) www.businessinsider.com time to read: +8 min

After the expenses were paid, which included the principal, interest, and taxes, each property cash flowed between $250 to $400. As of September, the median existing-home median sales price had dropped 7% from its peak in June to $384,800, according to the National Association of Realtors. Additionally, high inflation will mean people are less able to afford buying property, Hanson said. Tips to take advantage of the coming downturnOver time, real estate always recovers — and that's what Hanson is willing to bet his cash on. You also want to stay below the market median for the area you're buying in, he added.

☆ October jobs report: Employers keep hiring, but unemployment rises
▼ + stars: | 2022-11-04 | by ( Chris Isidore | ) edition.cnn.com time to read: +4 min

The report shows employers added 261,000 jobs in October and the unemployment rate rose to 3.7% from 3.5% in September. The unemployment rate is calculated using a separate survey of households rather than the employer survey used to count workers on the job. The higher-than-expected unemployment rate is also still low by historical standards — September’s 3.5% reading matched a half-century low. “Obviously, 261,000 jobs is great,” he told CNN in an interview Friday morning after the jobs report. But he acknowledged that even with the strong labor market, it’s high prices, not jobs, on the minds of most Americans.

As it battles inflation that remains at four-decade highs, the Federal Reserve is expected to hike its key interest rate another 0.75% Wednesday. This interest rate, known as the federal funds rate, affects the cost of borrowing and the pace of investment throughout the economy. As a result, some experts believe the Fed must keep raising interest rates, even if it drives unemployment higher. The U.S. unemployment rate currently stands at 3.5%. "This forces the Fed to continue its aggressive approach on interest rates."

☆ Home prices in these 8 markets are falling the fastest as the US housing market slows down at the quickest pace ever
▼ + stars: | 2022-10-27 | by ( William Edwards | ) www.businessinsider.com time to read: +4 min

It's official: home prices in the US are in a downward trend on a national level. This is killing buyers' ability to afford higher prices. Housing affordability — when taking into account home prices, mortgage rates, and incomes — is now at one of its lowest levels in decades, according to data from the National Association of Realtors. Scott Buchta, the head of fixed income strategy at Brean Capital, also said in a memo on Wednesday that home price declines would continue, eventually falling on a year-over-year basis. Many see a so-called "Fed pivot" back to dovish policy as necessary for mortgage rates to fall.

☆ The housing market has a big disconnect that can't last, and prices for new homes have a long way to fall, analyst says
▼ + stars: | 2022-10-26 | by ( Brian Evans | ) www.businessinsider.com time to read: +2 min

A disconnect between sales of new homes and mortgage demand is not sustainable, according to Pantheon Macroeconomics. Chief economist Ian Shepherdson said its likely reflects buyers rushing to lock in deals before mortgage rates climb higher. Meanwhile, prices for new homes "have a long way to fall before the market reaches a sustainable equilibrium," he warned. In a research note, Shepherdson pointed out that August saw a sales jump and the last month's dip still leaves sales much higher than what mortgage demand implies. Meanwhile, the 30-year fixed mortgage rate surpassed 7%, hitting a 21-year high.

☆ A 20% crash in the housing market is possible as mortgage rates continue to surge higher
▼ + stars: | 2022-10-21 | by ( Matthew Fox | ) www.businessinsider.com time to read: +7 min

There's a flashing red warning sign hitting one of the biggest segments of the US economy: the housing market. This is all a recipe for disaster, and it could ultimately lead to a 20% decline in housing prices, according to Pantheon Macro's chief economist Ian Shepherdson. The housing market is in free fall with "no floor in sight." Pantheon Macroeconomics' chief economist Ian Shepherdson is sounding the alarm on the housing market, warning that home prices could fall as much as 20%. The price movement has some scratching their heads, given that demand for lumber is largely tied to the housing market, which can't get out of its own way due to soaring mortgage rates.

☆ The housing market is in free fall with 'no floor in sight,' and prices could crash 20% in the next year, analyst says
▼ + stars: | 2022-10-20 | by ( Brian Evans | ) www.businessinsider.com time to read: +2 min

The housing market will continue to plummet as there's "no floor in sight," according to Pantheon Macroeconomics. Chief economist Ian Shepherdson wrote in a note Thursday that home prices could fall as much as 20%. His warning came after existing home sales dropped for an eighth consecutive month, the longest slump since 2007. "Eight straight declines in sales and no floor in sight," Pantheon chief economist Ian Shepherdson wrote in a note on Thursday. He added that the cumulative fall in sales from the peak in January is now 27%, "but this is not the floor."

☆ Lumber prices have defied a cooling housing market to climb 26% in October, but surging mortgage rates will keep a lid on further upside
▼ + stars: | 2022-10-20 | by ( Matthew Fox | ) www.businessinsider.com time to read: +3 min

Lumber prices have rallied 26% so far in October, but further gains may be limited as the housing market slows down. "At 7% interest rates, I wouldn't expect lumber to do much for a while," MaterialsXChange's Ashley Boeckholt said. In tandem with the Federal Reserve's aggressive interest rate hikes that started in March of this year, mortgage rates have soared. That's good news for homebuilders, as long as demand returns to the housing market, but one economist is skeptical. And that plays right into Boeckholt's view of a lumber market that is likely to flatline from here.

☆ US stocks stage big reversal to jump 2% after September inflation hits highest level since 1982
▼ + stars: | 2022-10-13 | by ( Matthew Fox | ) www.businessinsider.com time to read: +2 min

US stocks plunged on Thursday, and then soared after September's CPI report doubled expectations at 0.4% month-over-month. The September inflation report poured cold water on hopes that the Fed will pivot away from its interest rate hikes. The S&P 500 was down 2.4% as its low of the day, before it recovered all of those losses and surged as much as 2%. The reversal came after the S&P 500 tested 3,500, briefly hitting a low of 3,491. The hot CPI report erased all hopes that the Fed will soon pivot away from its aggressive rate hikes anytime soon.

☆ Spring and summer 2023 will finally be a good time to buy a home
▼ + stars: | 2022-09-27 | by ( Alcynna Lloyd | ) www.businessinsider.com time to read: +3 min

Inflation and interest rate hikes have made it even more expensive to buy a home. In addition, a slowing economy overall could bring 30-year mortgage rates back down. As economic volatility further seeps into the US real estate market, housing activity is fading fast. That's because inflation and interest rate hikes have dampened affordability for many would-be shoppers, leading to a steady decline in buyer demand. This combination of cooling prices and declining mortgage rates could indicate the typically busy real estate seasons of spring and summer could ring in a more affordable housing market in 2023.

The British pound plunged to a record low against the U.S. dollar Monday. The pound, historically one of the strongest currencies in the world, fell to as low as $1.04 before bouncing back to approximately $1.07. For most of the past few decades, the pound averaged a price of about $1.50 against the dollar. The decline in the British pound in itself won't have a direct impact on the U.S. economy, experts say. But as the value of the pound has dropped, the value of the U.S. dollar has reached all-time highs.

☆ Take no prisoners: In the Fed’s inflation fight, no one is spared
▼ + stars: | 2022-09-26 | by ( Christine Romans | ) edition.cnn.com time to read: +5 min

Global central banks are jacking up interest rates with no end in sight until high inflation is vanquished. The Federal Reserve is aggressively fighting inflation by lifting its benchmark interest rate five times so far this year. There isn’t.”Higher interest rates make life more expensive for anyone who borrows money. The higher rates ding home affordability but also might be holding back home sales. Higher interest rates make financing a car — when you can find one — even more expensive.

☆ US home prices could plunge 20% by next summer as a housing recession kicks in, a top economist says
▼ + stars: | 2022-09-23 | by ( Theron Mohamed | ) www.businessinsider.com time to read: +3 min

The US housing market is in a recession, Pantheon Macroeconomics' Ian Shepherdson said. Federal Reserve officials have indicated they want a correction in the housing market. "Housing, in short, is in recession, and everything connected to housing either is in recession now or soon will be," they added. "We've had a time of a red-hot housing market all over the country," Powell noted. "The deceleration in housing prices that we're seeing should help bring prices more in line with rents and other housing-market fundamentals.

☆ US stocks fall after steep sell-off as investors assess outlook for more aggressive rate hikes to come
▼ + stars: | 2022-09-22 | by ( Carla Mozée | ) www.businessinsider.com time to read: +3 min

The Federal Reserve's rate hike Wednesday was followed by rate hikes at other central banks. Other central banks including Switzerland and Norway followed suit with their own rate hikes as inflation burns hot throughout the global economy. The Bank of England raised its key rate by 50 basis points as inflation sits at 9.8%. US weekly jobless claims released Thursday rose slightly, by 5,000 to 213,000, but the labor market remains strong. Here's what else is happening today:"Bond King" Jeff Gundlach said the Fed's commitment to big rate hikes means a 75% chance of a US recession in 2023.

The Federal Reserve on Wednesday hiked its key interest rate by 0.75% for the third time in a row as it races to get ahead of the galloping inflation that is sapping the earnings of American consumers. This month, the Bureau of Labor Statistics reported inflation had climbed by 8.3% year on year and 0.1% month on month. By raising interest rates, the Fed hopes to rein in consumption and borrowing, which in turn should put downward pressure on prices. One area in which higher interest rates are taking a significant bite is housing. Bankrate's McBride laid out some financial advice Americans should keep in mind as interest rates climb.

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