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Tag Archives: Interest rates

Interest rates, the yield curve, and the Fed chasing a Phantom (lagging) Menace

Interest rates, the yield curve, and the Fed chasing a Phantom (lagging) Menace There’s a lot going on with interest rates in the past few days. Mortgage rates have increased above 7%: This is the highest rate since 2008. Needless to say, if it lasts for any period of time it will further damage the housing market. The yield curve has almost completely inverted from 3 years out (lower bar on left; upper bar shows a similar curve in April...

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The worst interest rate upturn since 1994

The worst interest rate upturn since 1994 is likely to produce the worst housing downturn in over a decade No economic news of note today; but tomorrow we will see housing permits and starts for March, and on Wednesday existing home sales. So let’s take an important look at housing. The recent increase in mortgage rates to over 5% is the most serious interest rate threat to housing in at least the past 30 years. As the below graph shows, the...

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The worst interest rate upturn since 1994 is likely to produce the worst housing downturn in over a decade

The worst interest rate upturn since 1994 is likely to produce the worst housing downturn in over a decade No economic news of note today; but tomorrow we will see housing permits and starts for March, and on Wednesday existing home sales. So let’s take an important look at housing. The recent increase in mortgage rates to over 5% is the most serious interest rate threat to housing in at least the past 30 years. As the below graph shows, the...

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Those Italian subsidies for Germany

Sergio Cesaratto – Those Italian subsidies for Germany December 8, 2021 Economics, EU politics, EU-Institutions, Finance, Inequality, National Politics, Regulation Italy has paid for certain ill-advised policies of the ECB – influenced by Berlin, the dominant power in Europe – with dozens of points of additional debt/GDP and finding itself ever poorer, while Germany symmetrically gained. Sergio Cesaratto teaches European monetary and fiscal...

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August housing construction shows stabilization, following interest rate moderation

August housing construction shows stabilization, following interest rate moderation This morning’s report on August housing permits and starts shows that the stabilizing of mortgage rates in the past few months has now stabilized housing construction. Housing starts increased 3.9% m/m, and total permits increased 6.0%. The less volatile single-family permits increased 0.6%. As a result, the overall trend for all three metrics for the past...

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Will A Rise in Interest Rates Lead to a New Debt Crisis?

by Joseph Joyce Will A Rise in Interest Rates Lead to a New Debt Crisis? The question of when the Federal Reserve will begin to reverse its loose policy stance continues to be a topic of widespread speculation. At last month’s meeting of the Federal Open Market Committee, its members showed a willingness to cut back on asset purchases in 2022 and to raise interest rates in 2023 but kept monetary policy on its current setting due to slower...

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The IMF as Deficit Owl? What’s Wrong with This Argument?

It seems the IMF aviary has turned on the hawks and embraced the deficit owls. Has the IMF joined the policy shift to MMT? Yes, in part, but it appears to be a viral form of MMT: according to Vitor Gaspar, the IMF’s head of fiscal policy, “Nations’ first priority should be vaccination, while the reduction of public debt is now far down the list of urgent actions… the main role of fiscal policy in the immediate future should be to be stimulative, to help restore economic growth, reduce...

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The IMF as Deficit Owl? What’s Wrong with This Argument?

It seems the IMF aviary has turned on the hawks and embraced the deficit owls. Has the IMF joined the policy shift to MMT? Yes, in part, but it appears to be a viral form of MMT: according to Vitor Gaspar, the IMF’s head of fiscal policy, “Nations’ first priority should be vaccination, while the reduction of public debt is now far down the list of urgent actions… the main role of fiscal policy in the immediate future should be to be stimulative, to help restore economic growth, reduce...

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Britain was not “nearly bust” in March

"Britain nearly went bust in March, says Bank of England", reads a headline in the Guardian. In similar vein, the Telegraph's Business section reports "UK finances were close to collapse, says Governor":Eh, what? The Governor of the Bank of England says the UK nearly turned into Venezuela? Well, that's what the Telegraph seems to think: The Bank of England was forced to save the Government from potential financial collapse as markets seized up at the height of the coronavirus crisis,...

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