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☆ Ivy Zelman called the last two big downturns in home prices. She told us that renters are about to get some very good news.
▼ + stars: | 2023-04-27 | by ( Marley Jay | ) www.businessinsider.com time to read: +3 min

Ivy Zelman predicted the housing market downturn in the 2000s and in 2022. When Ivy Zelman says the housing market is due for a turn, people tend to listen. Conditions look more balanced in other parts of the housing market, Zelman says. "We're not in the camp that a lack of inventory is a positive for the housing market," she said. "The housing market is not immune to what will ultimately be a recession with a credit crunch that has just begun," she said.

☆ US pending home sales slump unexpectedly in March
▼ + stars: | 2023-04-27 | by ( ) www.reuters.com time to read: +2 min

The National Association of Realtors (NAR) said on Thursday its Pending Home Sales Index, based on signed contracts, fell 5.2% last month to 78.9, the lowest since December. Economists polled by Reuters had forecast pending sales to have increased 0.5% in March, but the reported decline was larger than even the most pessimistic estimate in the survey. "The lack of housing inventory is a major constraint to rising sales," said NAR Chief Economist Lawrence Yun. That optimism was dented earlier this month when NAR reported that existing home sales slid 2.4% last month. While some firming has continued in the much-smaller market for new homes, the pending homes data suggests the market's overall recovery is likely to be choppy.

☆ US futures bounce but bank worries boost safer bets
▼ + stars: | 2023-04-26 | by ( ) www.reuters.com time to read: +3 min

Nasdaq futures were up 1.3% and S&P 500 futures up 0.4% following better-than-expected profits at Microsoft (MSFT.O) and a $70 billion stock buyback at Google parent Alphabet (GOOGL.O). Facebook parent Meta Platforms (META.O) reports later in the day, with U.S. markets on edge over softening U.S. data and fresh regional bank jitters. On Tuesday, First Republic Bank (FRC.N) shares were sold to a record low after the bank disclosed a $100 billion plunge in deposits. The S&P 500 (.SPX) and Nasdaq (.IXIC) both fell heavily while bonds rallied sharply and interest rate futures markets priced in a higher chance of Fed cuts later in the year. Two-year Treasury yields dropped 18.7 basis points on Tuesday and were steady at 3.9365% in Asia.

☆ US futures bounce with earnings but bank worries weigh
▼ + stars: | 2023-04-26 | by ( ) www.reuters.com time to read: +2 min

Nasdaq futures were up 1.4% and S&P 500 futures up 0.5% following better-than-expected profits at Microsoft (MSFT.O) and a $70 billion stock buyback at Google parent Alphabet (GOOGL.O). First Republic Bank (FRC.N) shares were sold to a record low after the bank disclosed a $100 billion plunge in deposits. Bonds rallied sharply and interest rate futures markets priced in a higher chance of Fed cuts later in the year. Two-year Treasury yields dropped 18.7 basis points overnight and were steady at 3.9221% in Asia. Brent crude futures hovered at $80.98 a barrel having dropped almost 4% overnight with the risk-averse mood.

☆ Gold prices subdued as caution sets in ahead of cenbank meetings
▼ + stars: | 2023-04-24 | by ( ) www.cnbc.com time to read: +2 min

Gold headed for its second decline in three sessions as strength in the dollar and equities diminished demand for the metal as an alternative asset. Gold is highly sensitive to rising interest rates, which raise the opportunity cost of holding non-interest bearing bullion. "Some firming in U.S. Treasury yields following last Friday's flash PMI data are keeping the downward pressure on gold prices," said Yeap Jun Rong, a market analyst at IG. Gold prices dropped by more than 1% on Friday after the release of surveys that showed the U.S. and euro zone business activity gathered pace in April. Moreover, the European Central Bank is expected to hike rates by a quarter percentage point on May 4, with some likelihood for a half-point hike.

At the same time, hiring remained strong through March, and wages continue growing faster than Fed officials feel is sustainable. The ECI is only released quarterly and includes both worker pay and benefits like healthcare, giving what Fed officials regard as a clearer sense of employment-related cost trends. For Fed officials, it could influence their view of whether the economy and inflation are likely to slow more - perhaps much more - quickly than anticipated. Reuters GraphicsEconomists expect the upcoming survey will show conditions tightening further still, this time alongside data showing credit from banks in decline. "Banks may not be done tightening lending standards, which will restrict access to credit, hurt business investment, reduce business formation, and weigh on job growth and consumer spending."

Investors may see rate cuts in the Fed's near future, part of a recession-breeds-accommodation view of the world, but "the labor market just seems very, very strong. The bulk of Fed policymakers as of March felt one more rate increase, which would raise the benchmark overnight interest rate to a range between 5.00% and 5.25%, was all that would be needed. Some policymakers and analysts worry it is those final steps that could push the economy into a recession. Reuters Graphics Reuters GraphicsLIMIT GUIDANCEGiven how inflation and the economy are behaving, Bullard said, the fewer promises made the better. Recession forecasts "are coming from models that put too much weight on the idea that interest rates went up quickly," Bullard said.

REUTERS/Brendan McDermid/File PhotoWASHINGTON, April 12 (Reuters) - Several Federal Reserve policymakers last month considered pausing interest rate increases after the failure of two regional banks and a forecast from Fed staff that banking sector stress would tip the economy into recession. But even they concluded high inflation remained so paramount they pressed on with a rate hike despite the risk. Fed staff assessing the potential fallout of banking sector stress projected a "mild recession" starting later this year, with a recovery in 2024-2025, the minutes showed. "Some participants noted ...they would have considered a 50-basis-point increase ... in the absence of the recent developments in the banking sector," the minutes said. "Participants observed that inflation remained much too high and that the labor market remained too tight; as a result they anticipated that some additional policy firming may be appropriate," the minutes said.

☆ Asian shares muted, dollar buoyant on odds of rate rise
▼ + stars: | 2023-04-10 | by ( Ankur Banerjee | ) www.reuters.com time to read: +4 min

MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) was 0.12% higher, while Japan's Nikkei (.N225) gained 0.5%. Traders have increasingly become convinced that the Fed will cut rates in the second half to ward off an economic downturn. The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, eased to 3.951%, after closing at 3.993% on Friday's abbreviated trading. A closely watched part of the U.S. Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes , seen as an indicator of economic expectations, was at -57.7 basis points. The yen weakened 0.41% to 132.69 per dollar as Japan's new central bank governor Kazuo Ueda takes over from Haruhiko Kuroda.

☆ Asian shares subdued as jobs data raises odds of Fed rate hike
▼ + stars: | 2023-04-10 | by ( Ankur Banerjee | ) www.reuters.com time to read: +4 min

MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) was 0.14% higher, while Japan's Nikkei (.N225) gained 0.5%. China shares eased on Monday, with the bluechip CSI300 Index (.CSI300) 0.2% lower, while the Shanghai Composite Index (.SSEC) down nearly 0.3%. Markets are now pricing in 66% chance of the Fed raising interest rates by 25 basis points in its May 2-3 meeting, according to CME FedWatch tool. Traders have increasingly become convinced that the Fed will cut rates in the second half to ward off an economic downturn. In the currency market, the dollar index , which measures the U.S. currency against six major peers, rose 0.118% to 102.14.

☆ Fed's Cook: watching credit conditions in calibrating interest rates
▼ + stars: | 2023-03-31 | by ( ) www.reuters.com time to read: +1 min

March 31 (Reuters) - U.S. Federal Reserve Board Governor Lisa Cook on Friday said she is watching credit conditions closely and will factor in potential economic headwinds from recent banking sector turmoil as she weighs the right level of interest rates to deal with high and persistent inflation. "On the one hand, if tighter financing conditions restrain the economy, the appropriate path of the federal funds rate may be lower than it would be in their absence," Cook said in remarks prepared for delivery. "On the other hand, if data show continued strength in the economy and slower disinflation, we may have more work to do." The Fed last week lifted the policy rate by a quarter of a percentage point to a 4.75%-5.00% range, and said "some additional policy firming may be appropriate." "I am closely watching developments in the banking sector, which have the potential to tighten credit conditions and counteract some of that momentum," Cook said.

☆ This ominous trend spells a hard landing for economy
▼ + stars: | 2023-03-29 | by ( Stephanie Landsman | ) www.cnbc.com time to read: +1 min

Investors may want to brace for a hard landing. A new chart from the Economic Cycle Research Institute shows a recession is imminent. "We're seeing lots of symptoms [of a significant downturn] when you have crises," the institute's co-founder Lakshman Achuthan told CNBC's " Fast Money " on Wednesday. Achuthan highlighted a special weekly leading index sent to clients. ECRI's weekly leading index, which is based on a combination of government economic data, soft surveys and market prices, shows a firming in the beginning of this year.

Mortgage rates have been inching down over the past couple of weeks and are nearing 6%. See more mortgage rates on Zillow Real Estate on ZillowMortgage Refinance Rates TodayMortgage type Average rate today This information has been provided by Zillow. See more mortgage rates on Zillow Real Estate on ZillowMortgage CalculatorUse our free mortgage calculator to see how today's mortgage rates will affect your monthly and long-term payments. But whether mortgage rates will drop in 2023 hinges on if the Federal Reserve can get inflation under control. If the Fed acts too aggressively and engineers a recession, mortgage rates could fall further than what current forecasts expect.

☆ Bank of England hikes interest rates by 25 basis points after inflation surprises
▼ + stars: | 2023-03-23 | by ( Elliot Smith | ) www.cnbc.com time to read: +1 min

A passageway near the Bank of England (BOE) in the City of London, U.K., on Thursday, March 18, 2021. LONDON — The Bank of England on Thursday hiked interest rates to their highest level since 2008, as it grapples with persistent high inflation against the backdrop of concerns over the banking system. The Monetary Policy Committee voted 7-2 in favor of raising the Bank rate by 25 basis points to 4.25%, in a widely anticipated move after official data on Wednesday showed that U.K. inflation unexpectedly jumped to an annual 10.4% in February. The U.S. Federal Reserve also increased its key rate by 25 basis points on Wednesday and suggested that "some additional policy firming may be appropriate." The Swiss National Bank lifted its own policy rate by 50 basis points to 1.5% on Thursday.

☆ Premarket stocks: Five big takeaways from the Fed's extraordinary meeting
▼ + stars: | 2023-03-23 | by ( Nicole Goodkind | ) edition.cnn.com time to read: +9 min

New York CNN —The Federal Reserve raised interest rates by a quarter percentage point on Wednesday as it attempts to fight stubbornly high inflation while addressing risks to financial stability. Powell said that the central bank anticipates growth will slow and inflation will decline gradually this year and next year. Before the banking crisis, the Fed was fairly certain that more rate hikes would be coming in the future. But markets tend to be fickle after Fed meetings and traders’ opinions of the meeting could change in early trading. Norway and Switzerland hiked rates earlier Thursday, and the Bank of England is expected to do so too at 8a ET.

☆ Treasury's Janet Yellen rains on Jay Powell's parade
▼ + stars: | 2023-03-23 | by ( Bob Pisani | ) www.cnbc.com time to read: +3 min

Federal Reserve Chairman Jerome Powell's press conference Wednesday threaded the needle almost perfectly. By the time Powell ended the press conference around 3:15 p.m. Both Yellen and Powell have been at great pains to say that deposits are safe, and by so doing are implying an implicit backstop for deposits. Powell, in his press conference, said "I think depositors should assume that their deposits are safe." But in her testimony Wednesday, Yellen said the Federal Deposit Insurance Corporation (FDIC) was not considering providing "blanket insurance" for all banking deposits.

The Fed's policy-setting committee raised interest rates by another quarter of a percentage point in a unanimous decision on Wednesday, lifting its benchmark overnight interest rate to the 4.75%-5.00% range. Fed officials still feel that "some additional policy firming" may be needed, and they penciled in one more quarter-of-a-percentage-point rate increase by the end of the year. The yield on the 2-year Treasury note , which is highly sensitive to Fed rate expectations, was down more than 21 basis points in the session. Financial markets went a step further, betting that the Fed won't raise rates any further from here and will be reducing them by this summer. "The Fed has been spooked by Silicon Valley Bank and other banking turmoil.

☆ How the banking crisis clipped the Fed's wings
▼ + stars: | 2023-03-22 | by ( Allison Morrow | ) edition.cnn.com time to read: +4 min

The message was clear: Buckle up, America — we are going to keep raising rates and get inflation down, come hell or high water. Silicon Valley Bank collapsed, followed by Signature Bank, stirring fears of a 2008-like financial calamity. “We no longer state that we anticipate that ongoing rate increases will be appropriate to quell inflation,” Powell said. How’d Wall Street take the news? But the mood on Wall Street turned sour in response to both Powell’s comments and remarks from Treasury Secretary Janet Yellen, who was testifying before Congress at the same time.

☆ Fed hikes rates by a quarter percentage point, indicates increases are near an end
▼ + stars: | 2023-03-22 | by ( Jeff Cox | ) www.cnbc.com time to read: +4 min

watch nowWASHINGTON — The Federal Reserve on Wednesday enacted a quarter percentage point interest rate increase, expressing caution about the recent banking crisis and indicating that hikes are nearing an end. That wording is a departure from previous statements which indicated "ongoing increases" would be appropriate to bring down inflation. Still, the median of the estimates points to a 0.8 percentage point reduction in rates in 2024 and 1.2 percentage points worth of cuts in 2025. Estimates released Wednesday of where Federal Open Market Committee members see rates, inflation, unemployment and gross domestic product underscored the uncertainty for the policy path. The Dow Jones Industrial Average is up some 2% over the past week, though the 10-year Treasury yield has risen about 20 basis points, or 0.2 percentage points, during the same period.

☆ The Fed's latest move confirms it's trying to thread the needle between cooling inflation and helping banks in turmoil
▼ + stars: | 2023-03-22 | by ( Ayelet Sheffey | ) www.businessinsider.com time to read: +4 min

The Federal Reserve raised interest rates by 25 basis points on Wednesday. It's the second interest rate increase this year. It comes on the heels of Silicon Valley Bank's collapse, which prompted some calls to pause the rate hikes. "We expect 2023 to be a year of significant decline in inflation," Powell said in February. So while the committee is slowing interest rate hikes for now, they plan to continue increases this year.

☆ UK inflation sucker-punches the BoE, while sterling bulls cheer
▼ + stars: | 2023-03-22 | by ( Amanda Cooper | ) www.reuters.com time to read: +4 min

British consumer price inflation (CPI) rose to 10.4% in February from January's 10.1%, above all economists' forecasts in a Reuters poll and almost back to where it was in December. "Core CPI missed by 0.5% - that's one of the biggest, if not the biggest misses on CPI in the recent series of inflation data. "The market is going to be second-guessing (the BoE) right now - it's difficult to assume there's just one more rate hike left in the tank," she said. RLAM's Nicholl noted recent data, such as employment, business activity and manufacturing, had shown strength, and consumer spending has held up. Derek Halpenny, EMEA head of research for global markets at Nomura said January and February's combined annual inflation rate of 9.67% makes for a "mildly supportive" outlook for the pound.

☆ Markets saw a dovish Fed hike but Powell's warning on credit conditions spooked investors
▼ + stars: | 2023-03-22 | by ( Patti Domm | In | ) www.cnbc.com time to read: +3 min

Are we going to celebrate the end of Fed rate hikes because things have started to hit the fan?" Strategists pointed to Powell's comment that financial conditions may have tightened more than it appears in traditional market measures, which would be stocks and bond spreads. "Number one, he remains unwavering on inflation, and he does acknowledge he sees a tightening of credit conditions. Briggs also called out Powell's comments about the impact from credit tightening , and the effect those actions can have. "That tightening via credit conditions can take the place of hikes (and vice versa if we don't get tighter credit conditions)," he said. "

☆ Uncertainty reigns as Fed considers interest rate hike
▼ + stars: | 2023-03-20 | by ( Lindsay Dunsmuir | ) www.reuters.com time to read: +4 min

The U.S. central bank will begin its two-day policy meeting on Tuesday as policymakers consider whether still too-hot inflation merits an interest rate hike or whether turmoil in financial markets outstrips those concerns. "I don't think the Fed has any good options here," said Tim Duy, chief U.S. economist at SGH Macro Advisors. Prices of Fed funds futures reflected a roughly 70% probability of a quarter-percentage point rate hike on Monday versus about a 30% chance of no change, a slight firming in expectations compared to the end of last week. The tumult has occurred during the central bank's premeeting blackout period that prevents officials from offering public clarity on their assessment of the situation. The investment bank then expects three more 25 basis point hikes in May, June, and July, with the policy rate peaking in the 5.25-5.5% range.

☆ 4 steps the Fed needs to take to calm markets after the Silicon Valley Bank collapse, and what investors should remember amid the chaos, according to JPMorgan's chief strategist
▼ + stars: | 2023-03-17 | by ( Marley Jay | ) www.businessinsider.com time to read: +5 min

The Fed needs to stop raising interest rates now, says David Kelly of JPMorgan Asset Management. Step one: don't hike interest rates any more. "You just pause on interest rates and you say that we're making good progress on inflation," he said. "What you need to do in the long run is have a very steady level of interest rates," he said. He explained that interest rates do a bad job controlling demand and end up creating bubbles and economic problems.

☆ CNBC Daily Open: Credit Suisse spreads the banking crisis to Europe
▼ + stars: | 2023-03-16 | by ( Yeo Boon Ping | ) www.cnbc.com time to read: +2 min

This report is from today's CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. The banking turmoil in the U.S. — which appeared to be contained just yesterday — spread to Europe on Wednesday in the form of Credit Suisse. Tightening financial conditions and a slowdown in the economy are exactly what the Federal Reserve is hoping to engineer through its interest rate hikes. Subscribe here to get this report sent directly to your inbox each morning before markets open.

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