This is what’s really happening right now with inflation, the economy and real estate.
Inflation Debate
April 14 (King World News) – Peter Boockvar: In the context of the inflation debate, if there is a word that is opposite ‘transitory’ it would be ‘sticky.’ The Atlanta Fed’s sticky CPI print for March out yesterday was up 3.5% (one month annualized change). That is up from 2.3% in February, 1.1% in January and 1% in December. The sticky core rate was higher by 3.7% vs 2.5% in February, .9% in January and .6% in December. They define ‘sticky’ as prices that are “slow to change” based on the frequency of their price adjustment. This as opposed to their ‘flexible’ measure.
To repeat what I said yesterday, companies are only just beginning to pass on their own cost pressures to the rest of us. We’ll see March import prices at 8:30am which all of a sudden is an important number to watch.
The Cleveland Fed’s trimmed CPI rose .24% m/o/m in March, the quickest pace since July 2020…
To hear Sean Boyd discuss $3,000 gold and the big game-changer
for the gold market CLICK HERE OR ON THE IMAGE BELOW.
Economy
Here are some comments of note from Jamie Dimon in the quarterly press release:
“consumer spending in our businesses has returned to pre-pandemic levels.” Thank you Uncle Sam
“We are also seeing good momentum in Travel and Entertainment…”
“Home lending originations were very strong, up 40% with almost 75% of consumer mortgage applications completed digitally, but we expect this to slow with the recent rise in interest rates.“
“Loan demand remained challenged…”
“Corporate clients continued to access capital markets for liquidity and repay revolvers.” The latter is a factor in why commercial and industrial loans outstanding for the entire industry is down so much.
Real Estate
Coincident with the drop in the 10 yr Treasury yield, the average 30 yr mortgage rate fell by 9 bps w/o/w to 3.27% but that wasn’t enough to help mortgage apps. Purchases fell by 1.5%, down for the 3rd straight week but still is up 51% on easy comps. Refi’s fell by 5% and that marks 6 straight weeks of declines. They are also down for the 11th week in the past 13 which reflects how sensitive refi’s are to changes in still historically low mortgage rates even though many people still having mortgages with rates well above current levels. On the purchase side we know the industry is dealing with low inventories, aggressive price increases and now along with higher rates over the past few months.
After the recent rally, the euro heavy dollar index is quietly back to a 4 week low.
***To listen to Dr. Stephen Leeb discuss the timing for gold taking off toward the $20,000 level CLICK HERE OR ON THE IMAGE BELOW.
***To hear Alasdair Macleod discusses extreme shortages in the silver market CLICK HERE OR ON THE IMAGE BELOW.
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