1. The thought is the Fed could make homes more affordable by cutting interest rates
So far, mortgage rates are doing opposite, and rising instead
Why? Because mortgage rates move with the yield on the 10-year Treasury, which has surged this week pic.twitter.com/zk0c3UJi9Y
— Michael Burry Stock Tracker ♟ (@burrytracker) December 20, 2024
3. A true flywheel effect
Inflation raises mortgage rates because it erodes the value of money, prompting lenders to demand higher rates to maintain their returns
Central banks often respond to inflation by raising interest rates, which increases borrowing costs across the…
— Michael Burry Stock Tracker ♟ (@burrytracker) December 20, 2024
5. Let’s not forget about home buyers
Mortgage applications are incredibly low because of such high borrowing costs
Remember: If you borrow $200,000 with a 30 yr. fixed mortgage at 3%, your monthly payment (excluding taxes and insurance) is around $843
If the rate increases to… pic.twitter.com/uQkbua9ufX
— Michael Burry Stock Tracker ♟ (@burrytracker) December 20, 2024
Cattle ignoring bonds.
It’s a process. pic.twitter.com/ecamggWpsU
— The Great Martis (@great_martis) December 20, 2024
Credit Stress 2.1 | Credit spreads started widening before the Fed meeting, but that trend picked up steam in the days after. We move up to stress level 2.1, the first move higher after what feels like years of progressive narrowing.
We watch depth and duration now for follow… pic.twitter.com/1je0U6RXOw
— Credit Spread Alert (@AlertCredit) December 20, 2024
This is truly a historic moment in the US economy
US government interest expense has gone parabolic in the past few years
And has now crossed a staggering $1.1 trillion
At this rate, they are expected to reach $1.7 trillion by 2034
US debt crisis is now becoming a MAJOR… pic.twitter.com/AJGPfddx7c
— Bravos Research (@bravosresearch) December 20, 2024