Interest Rates

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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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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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Mark Your Calendar: March 10 Will Be a Landmark Day for Markets

(Bloomberg) — This year has already had its fair share of huge days for markets, but the biggest may be yet to come: March 10. That’s when the next datapoint on U.S. inflation is due and the European Central Bank meets. Just as ECB President Christine Lagarde is starting her press conference, U.S. consumer prices […]

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Billions Are Flowing to Cash-Like ETFs in ‘Hunt’ Before Fed Hike

(Bloomberg) — What’s safer than short-duration bonds? Even shorter duration debt. As investors brace for an increasingly aggressive Federal Reserve, money is flooding into cash-like ETFs — which are seen as relatively less vulnerable to interest-rate risk. Traders have been piling into exchange-traded funds mostly focused on ultra-short instruments like Treasury bills, while offloading ETFs […]

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The Jobs Report Reveals a Booming Labor Market. Here’s Where Interest Rates Are Headed.

President Joe Biden speaking about the January jobs report. Saul Loeb/AFP/Getty Images Good news for Main Street, not so good news for Wall Street. Once again, a booming labor market is likely to translate to losses in bonds and stocks as the Fed and other major central banks remove the extraordinary stimulus enacted in response […]

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RTX is nearing its 52-week high – could it go higher?

One of the big recovery stories over the past year has come from the Aerospace industry, which includes commercial airlines. It really comes as no surprise to say that in 2020 and the early part of 2021 the industry was one of the biggest, unquestioned losers in the stock market after commercial travel dried up […]

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