Inflation remains hotter than expected, muddying path for Fed rate cuts

Mortgage Interest Rates Increase: How much is your payment increasing with the latest inflation rate? (msn.com)


The unexpected rise in mortgage rates will hit the pockets of American homeowners.

The average long-term mortgage rate has risen once again this week, with the average 30-year fixed loan now at 7.08 per cent, according to Bankrate's latest survey of large lenders.

Another mortgage buyer, Freddie Mac, said the average rate on a 30-year mortgage rose to 6.88 per cent from 6.82 per cent last week. In comparison to a year ago, where the rate averaged 6.27%, this is having a genuine impact on American homeowners.

 

I definitely don't agree with loan forgiveness. If a university conned people out of money, go after the university. If someone willingly put themselves in debt, they should be responsible for that debt.

 

If a university “cons people out of money”, such that it’s a “for profit” college or diploma mill, it should not be allowed to participate in federally backed loans in the first place!

The only reason the loans could be subject to federal forgiveness, is that the fed govt made the mistake of “blessing” those schools and allowing them to access loans.

I know righties probably imagine it’s Yale and Harvard liberal arts grads driving the issue, but in reality it has more to do with the quality of school (or lack thereof). I’ve said for a long time the bottom tier schools with most defaults should be cut off from loans (maybe probationary at first but cut off if they don’t get their shit together and improve their student default rates). Shut ‘em down that way.

I’m not a fan of “blanket forgiveness”, but I think it’s reasonable to look at that for victims of sham schools or those who are a certain # of years into repayment based on income.

 

The biggest thing I see are the grocery prices. They are much higher than actual inflation. They’re up 25-75% since April 2020 (covid).

A lot of corporate greed here, but also a lot of creepy joe incompetence as well.

 

You seem to know a whole lot about this, and we'd be well served to hear your thoughts. What has Biden done poorly regarding grocery store prices?

And does your expertise allow you any insight into what Rapey Don would have done differently?

 

My son closes on his first house on May 1st. They are very happy with the value they are getting for their money. Sure they’d love a lower rate. But it works for them.

It’s been my experience that everyone thinks they pay too much for their house and then never think about it again after they close.

 

Bullshit, you know you gave him the 20% down payment.

 

They didn’t even ask. But i am tag team driving the U-Haul 2,000 miles which is worth more than money.

 

Another signal suggesting “higher, longer”.

Powell says taking 'longer than expected' for inflation to reach Fed's 2% target

“Federal Reserve Chair Jerome Powell said Tuesday that it will take "longer than expected" to achieve the confidence needed to get inflation down to the central bank’s 2% target, signaling that it will also likely take longer to cut rates.

"Given the strength of the labor market and progress on inflation so far, it's appropriate to allow restrictive policy further time to work and let the data and the evolving outlook guide us," Powell said at an event in Washington on the Canadian economy.”

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“Powell's new stance was a departure from comments just two weeks ago when Powell offered assurances that the overall outlook had not changed much despite some hotter-than-expected readings at the start of the year.

He said then that central bank officials expect to lower rates at "some point" this year. On Tuesday he offered no such assurances or predictions of rate cuts.”

 

Yeah, maybe Senators Oz and Walker could co-sponsor something with him.

 

Blame the banks. They can lower their rates, and they have in the last year. In times like this, the smart ones get creative (from an email I got from a mortgage broker):

Do you know buyers who are short cash to close? Now there's an assistance program for them!

Down Payment:

Up to 5.0% for down-payment and closing cost assistance.

Eligibility

EVERYONE - US Citizens, Permanent Resident Aliens, and First-Time Homebuyers allowed.

FICO: Minimum of 620

Property Types: SFR, 1-4 Units, PUDS, Double-Wide Manufactured Homes.

CHECK OUT THESE OTHER GREAT PROGRAMS!

• TEMPORARY INTEREST RATE BUYDOWN LOANS FOR FHA, VA, AND CONVENTIONAL - REDUCE RATE UP TO 2% - FREE APPRAISAL FOR A LIMITED TIME
• 1% DOWN-PAYMENT LOANS
• INVESTOR LOANS UP TO 80% LOAN TO VALUE - NO INCOME VERIFICATION (also known as a DSCR loan)
• RENOVATION LOANS UP TO 95% COMBINED LOAN TO VALUE
• FOREIGN NATIONAL LOANS UP TO 70% LOAN TO VALUE WITH NO INCOME OR CREDIT VERIFICATION
• ZERO ($0) PAYMENT HECM MORTGAGES FOR PURCHASE AND REFINANCE - RESERVED FOR 62 YEARS OR OLDER ONLY - (aka Reverse Mortgage)
• BANK STATEMENT-ONLY LOANS FOR SELF-EMPLOYED UP TO 90% LOAN TO VALUE
• CONSTRUCTION LOANS UP TO 95% LOAN TO VALUE WITH CONVERTIBLE OPTION TO PERMANENT LOAN.
• $6,000 FIRST-TIME HOMEBUYER GRANTS AVAILABLE IN THESE AREAS: MIAMI, FORT LAUDERDALE, WPB, ORLANDO, KISSIMMEE, SANFORD, TAMPA, ST. PETE, AND CLEARWATER - SEE IF YOUR BUYER QUALIFIES - CALL FOR DETAILS
• 1099 LOANS FOR SELF-EMPLOYED INDIVIDUALS
• HARD MONEY LOANS NOW AVAILABLE FOR INVESTORS
• USDA LOANS NOW AVAILABLE!
• MULTI-FAMILY HOUSING LOANS UP TO 8 UNITS!
• WE FINANCE MANUFACTURED HOMES

There are also first time buyer programs where, depending on their income, one could get up to $45,000 for a down payment. Also, if you have a large cash deposit, you can assume some of those 2-3% mortgages.

 

Do you know anyone personally that have benefited from these offers?

 

These particular plans, while not new, are tweaked to work with the market as it is now. I know people who have benefited from various formats of these programs.

 

Ok, I just know a lot of these programs that I have looked into end up being some sort of scam or anyone making any kind of descent living do not qualify. Just was curious if anybody actually benefited, if so great!

 

No, this falls directly on the Biden

 

Simple fix, change the target to 3%...new normal and all.

 

Into change in sentiment. How does this impact interest rates?

Investors increasingly expect 'no landing' for US economy


“A growing number of investors believe the US economy is headed for a "no landing"scenario, in which inflation doesn't reach the Fed's 2% target, but the US economy keeps growing.

Thirty-six percent of respondents to Bank of America's Global Fund Manager Survey, released on Tuesday, said they believe the most likely outcome for the global economy in the next 12 months is a "no landing." This was a noted move higher from the 23% who saw the outcome a month ago and the highest level seen since June 2023, the earliest date on BofA's graph.”

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“These revisions higher come as expectations for inflation have also been on the rise after several hotter-than-expected consumer price readingsthrough the first three months of the year. This has pushed an increasing number of economists to suggest the Fed may not cut rates this year, resulting in a "no landing" for 2024.

"The lack of moderation in consumer spending and inflation will undermine Fed officials’ confidence that inflation is on a sustainable course back to 2%," Nationwide chief economist Kathy Bostjancic wrote in a note on Monday. "[Recent data] likely delays rate cuts to September at the earliest and could push off rate reductions to next year."

 

Anyone who owns a small business or works in construction/development could see this coming.

US economic growth falls short of expectations with 1.6 percent annu