Fed delivers a 25 bps rate hike amid bank failuresÂ
The Fed has decided to forge ahead in its fight against inflation, despite several bank closures that have caused turbulence in the financial markets.
The Fed has decided to forge ahead in its fight against inflation, despite several bank closures that have caused turbulence in the financial markets.
Lawrence “Larry” Summers, former U.S. Treasury secretary.Kiyoshi Ota/Bloomberg Former Treasury Secretary Lawrence Summers said the Federal Reserve shouldn’t be spooked into easing its campaign to contain inflation out of excessive concern about a credit crunch in the wake of the recent banking turmoil. “It would be very unfortunate if, out of solicitude for the banking … [Read more…]
The Ides of March⦠And college basketball time. Here in Kentucky (men #6 in the East, Louisville womenâs team #5) I overheard someone on the phone. âYesterday I saw a woman in Walmart with March Madness teeth. She was down to her final four.â March Madness is in full swing, whether it is hoops or bonds. Or bank stocks. Is this really a fundamental structural plunging of the United Statesâ financial system? Doubtful. Moodyâs came out with a warning about downgrading certain banks in the United States. It is not 2008. How much of this is psychology? Tweeting causing a run on deposits? Banks everywhere are looking at their liabilities (deposits, since they owe their depositors money) and assets (the money lent out using their depositorâs money, or securities owned. âLending long and borrowing shortâ works when banks can pay very little on their deposits (like checking accounts earning 0 percent) and take that money and earn 4 or 6 percent on securities. But when the deposit base becomes unstable, and a bank has to liquidate those securities at 80 or 90 cents on the dollar, it becomes a problem fast. (Much more below.) Todayâs podcast can be found here and this week is sponsored by Richey May, a recognized leader in providing specialized advisory, audit, tax, technology, and other services in the mortgage industry and in banking. Todayâs has an interview with Bank of England Mortgageâs Quinton Harris on the art and science of forecasting the housing, mortgage, and bond markets.
The collapse of Silicon Valley Bank and Signature may trigger lower mortgage rates, but it will likely increase scrutiny on IMBs and their risk management strategies.
Mortgage rates headed past 7% after Powell warns Congress on inflation Inman
Chair Jerome Powell said the Federal Reserve is likely to lift interest rates higher and potentially faster than previously anticipated with inflation persisting, an unexpectedly aggressive posture following last month’s step down in the pace of hikes. The remarks, coming in testimony before Congress on Tuesday, opened the door to officials lifting the Fed’s benchmark … [Read more…]
Demand for purchase loans sinks as mortgage rates rebound Inman
We’re about four years into this blog, and at this point I finally have to admit I am a complete and total fraud. I mean sure, I saved enough to retire in just nine years and have had a great time running around like a free man in this subsequent decade. But that was an isolated incident, […]
Temperatures are slowly starting to rise in many parts of the country â and so is homebuilder sentiment, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) report.