The US economy was sitting high on the global mountain top before Covid. Then Covid struck, The Federal Reserve and Congress went wild with stimulus spending and inflation went wild. This is Biden Country, a feeble shell of this once great nation.
As The Fed tries to counter the years of excess monetary stimulus pre and post Covid by raising rates, we have seen mortgage rates rise 143% under Biden’s leadership. At the same time, the US Treasury yield curves (short 2Y-3m and long 10Y-2Y) remain deeply inverted.
As of this AM, The Fed Funds Futures market is pricing in a chance of continued rate hikes by The Fed, but mostly we are at 5.25% at least until November when rates are forecast to begin declining.
And the Taylor Rule is still signaling rate hikes to 10.12%. We are at only 5.25%. And with Biden feebily running for reelection, the only path forward is rate CUTS.
