Interest Rates

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Rising Interest Rates

Fed Minutes Could Bolster Bets for 75 Basis-Point Hike in July

(Bloomberg) — The Federal Reserve will unveil details of what policy makers debated last month that may shed light on how they view the near-term path for interest rates amid surging inflation and signs of a slowing economy. Chair Jerome Powell has said the Fed could hike by either 50 basis points or 75 basis […]

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World’s Most Aggressive Central Bank Raises Key Rate to 200%

(Bloomberg) — Sign up for the New Economy Daily newsletter, follow us @economics and subscribe to our podcast. Zimbabwe’s central bank raised interest rates to a record and the government officially reintroduced the US dollar as legal currency to rein in surging inflation and stabilize the nation’s tumbling exchange rate. The monetary policy committee more […]

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Value Investing

Are homebuilders like OC as radioactive as they seem right now?

One of the classic benchmarks of the economy’s health and strength is the housing market. Stocks of retail companies like Home Depot (HD) and Lowe’s (LOW) often serve as proxies of to guide the market’s perception of the housing market.  It’s also pretty common to see experts and analysts referring to homebuilders like D.R. Horton […]

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US House Prices Are Likely to Drop as Rates Rise, Capital Economics Says

(Bloomberg) — US house prices are likely to fall as mortgage rates exceeding 6% crimp affordability for the average buyer, according to Capital Economics. Property prices could contract an annual 5% by the middle of next year, Matthew Pointon, senior property economist, said in a research note Monday. He’d previously projected no change in values […]

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Fed’s Waller Backs Half-Point Rate Hikes at ‘Several’ Meetings

(Bloomberg) — Federal Reserve Governor Christopher Waller said he wants to keep raising interest rates in half-percentage point steps until inflation is easing back toward the US central bank’s goal. “I support tightening policy by another 50 basis points for several meetings,” he said in remarks prepared for delivery on Monday in Frankfurt. “In particular, […]

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Fed Saw Aggressive Hikes Providing Flexibility Later This Year

(Bloomberg) — Most Federal Reserve officials agreed at their gathering this month that the central bank needed to tighten in half-point steps over the next couple of meetings, continuing an aggressive set of moves that would leave policy makers with flexibility to shift gears later if needed. “Most participants judged that 50 basis-point increases in […]

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Rate Hikes Hit Canada Housing With 1st Price Drop in Two Years

(Bloomberg) — Canadian home prices fell for the first time in two years as a rapid rise in interest rates looks set to threaten one of the world’s hottest housing markets. Benchmark home prices declined 0.6% in April from the month before, the first drop since April 2020, according to data released Monday from the […]

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Powell Seen Slowing Rate Hikes After May and June Front-Loading

(Bloomberg) — Federal Reserve Chair Jerome Powell is likely to slow the pace of interest-rate increases after front-loading policy with half-point hikes next week and in June, economists surveyed by Bloomberg say. They expect the Federal Open Market Committee to raise its benchmark rate by 50 basis points at the May 3-4 meeting and do […]

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Bond Danger Builds With Fed Set to Break From Its Cautious Past

(Bloomberg) — The bond market, St. Louis Fed President James Bullard said on Thursday, “is not looking like a very safe place to be.” Few investors would argue with that — except, perhaps, to call it an understatement. New waves of selling engulfed the Treasury market over the past week, roiling investors and analysts who’ve […]

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BlackRock Strategists Say Traders Are Wrong on Fed’s Rate Path

(Bloomberg) — Strategists from the world’s biggest asset manager are challenging traders betting that the Federal Reserve will raise rates to around 3% next year, saying that policy makers will raise borrowing costs to 2%, but not go much further. An overly aggressive path of hikes to combat the spiraling cost of living may backfire, […]

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Interest rates are rising. Should you stay away from homebuilders like TOL?

In my opinion, one of the really surprising stories of the past two years has been not only the resilience, but the simple outperformance of the real estate industry. Despite the global COVID-19 pandemic and all of the complications that have accompanied it, and that some now say we may never fully get away from, […]

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