Entries by Wolf Richter

Is 4% the “Magic Number” for Mortgage Rates to Prick the Housing Market (and Stocks)?

Estimated Reading Time: 2 minutes

The Magic Number in 2018 was around 4.8%. In 2006, it was around 6%. But with today’s super-inflated home prices? Here are the signs. The average weekly contract interest rate for 30-year fixed-rate mortgages with conforming loan balances rose to 4.06 percent for the week ended February 18, the second week in a row above […]

WHOOSH Goes the Dollar’s Purchasing Power in January as Inflation Now Infests Services

Estimated Reading Time: 2 minutes

Inflation burns out of control, but the Fed is still pouring fuel on it. You can no longer just blame supply chains. This is far bigger. OK, the Fed and American consumers and wage earners have, excuse the technical jargon here, a serious-ass problem on their hands that has just gotten worse. The broadest Consumer […]

Most Reckless Fed Ever: “Real” Federal Funds Rate Now the Most Negative Ever

Estimated Reading Time: 2 minutes

Even most junk bonds have negative “real” yields. And the Fed is still fueling this madness. After a year of brushing off inflation as temporary, while inflation spread deeper and further into the economy, and got worse month after month, the Fed is finally talking about tightening. But so far, it’s just talking about it. […]

What I See for 2022: Interest Rates, Mortgage Rates, Real Estate, Stocks & Other Assets as Central Banks Face Raging Inflation

Estimated Reading Time: 3 minutes

An extra-special cocktail of three powerful ingredients with no cherry on top awaits us in 2022. Super-inflated asset prices such as housing, stocks, and bonds; massive inflation; and central banks that have started to react. Many central banks have started pushing up interest rates; others have ended asset purchases. And Quantitative Tightening (QT) – central […]

End of Easy Money: Global Tightening in Full Swing, While the Fed Promises to Wake Up in Time Next Year

Estimated Reading Time: 2 minutes

Central banks jacked up rates to catch up with run-away inflation, but most fell further behind; only Russia caught up. The Fed didn’t even try.   The Czech National Bank dished out another surprise today, raising its main policy interest rate by 100 basis points to 3.75%, the highest since February 2008, and the fifth rate […]

WOOSH, Shock-and-Awe Loss of Dollar Purchasing Power Hits Americans. Worst Inflation in 40 Years. Getting it Under Control Will Be a Bitch

Estimated Reading Time: < 1 minute

Inflation for Urban Wage Earners & Clerical Workers (CPI-W) = 7.6%. Fed is still pouring fuel on the raging fire. Most reckless Fed ever. The broadest Consumer Price Index (CPI-U) spiked by 0.8% in November from October, and by 6.8% from a year ago, the highest since June 1982, according to data released by the Bureau of […]

Social Security COLA Calculations May Get Changed to CPI-E as Part of the Reform Bill. What Does it Mean for Retirees?

Estimated Reading Time: 2 minutes

Watch out for the costs of housing, medical care, and gasoline. Social Security benefits are adjusted for inflation – the Cost of Living Adjustments or COLAs – based on the “Consumer Price Index for Urban Wage Earners and Clerical Workers” (CPI-W), released by the Bureau of Labor Statistics. By this measure, inflation was 6.9% in […]