Redfin Economists’ Weekly Take: Rates Will Jump Around As Markets Weigh Iran War and Fed Outlook
Redfin economists expect mortgage rates to keep oscillating as the Iran‑Israel conflict pushes energy prices higher and markets brace for the Federal Reserve’s second‑to‑last FOMC meeting this week. Mortgage rates have climbed from roughly 6.0% to 6.36%, while the ten‑year Treasury yield rose to 4.22%. The Fed is projected to hold policy steady and likely postpone any summer rate cuts, even as inflation forecasts inch upward. Upcoming PPI data and the Fed’s inflation outlook will shape the timing of future cuts.
War‑driven Inflation Fuels Liquidity‑to‑solvency Crises
For those bullish wars, don't forget: WARS ARE INFLATIONARY which can accelerate economic deterioration that is already in motion. Now pit INFLATION against this backdrop: liquidity versus solvency.👇 Liquidity crisis can quickly turn to solvency crisis. Fed can step in during liquidity episodes, Fed...
Fed's Treasury Holdings Surge, Echoing Past Funding Crises
Preparation for liquidity crisis to minimize repo/money market volatility that are threatening credit spreads due to oil spike and growth contraction from Trump trapping US-Israel War on Iran. #HYOAS “The Fed now holds about $358B in Treasury bills. That’s higher than the...
Rates Spark: The Impact Is No Longer Transitory
The U.S. 10‑year Treasury yield is projected to climb into a 4.25‑4.5% band before easing back toward 4%, driven by higher nominal and real yields after the war’s shock. Even as the conflict winds down, inflation expectations remain structurally elevated,...
Three S&P 500 Headwinds, One Overlooked Indicator Each
The S&P 500 has 3 headwinds right now. Most investors are only watching one. Here's what all 3 are, and the single indicator for each that tells you if it's getting better or worse 🧵
US Industrial Production Rises For 4th Straight Month In February (0.2% MoM, 1.4% YoY)
U.S. industrial production posted a fourth consecutive monthly gain in February, rising 0.2% month‑over‑month and 1.44% year‑over‑year, outpacing the 0.1% consensus. Manufacturing output mirrored the broader trend, also expanding 0.2% MoM, with durable goods edging up 0.1% and nondurables up...
Stagnant Job Turnover Shows Employers, Workers Cautious Amid Uncertainty
The January 2026 JOLTS report shows labor turnover stalled despite job openings rising to 6.9 million. Total hires held steady at 5.3 million and quits slipped to 3.1 million, while layoffs edged down, reinforcing a “no‑hire, no‑fire” environment. This follows a 2025 slowdown...
U.S. Faces $1 Trillion Deficit Early in FY
The U.S. federal government has collected $2.1T in revenue so far this fiscal year. But spending has already reached $3.1T. That leaves a $1.0T deficit. We aren't even through Q1 yet.
SPY Preps for Inflation Data and Fed Decision
$SPY levels going into the week. On the agenda: - CPI & PPI Inflation Data (Wed) - FOMC / Interest Rate Decision (Wed) - Fed Press Conference (Wed)
US February Industrial Production vs +0.2% Expected
U.S. industrial production rose 0.2% in February, edging past the 0.1% forecast and following a robust 0.7% gain in January. Capacity utilization held at 76.3%, still well below its long‑run average, signaling lingering slack in the sector. Manufacturing output matched...
Higher Rates, Free Market, Not Fed Cuts, Win
There's going to be a lot of people complaining this week when the Fed doesn't cut rates. Let them. It's the right decision. In fact, interest rates should be much higher than where they are today. The free market should...
The Health Care Job Market
The Bureau of Labor Statistics reported that total non‑farm payrolls fell by 92,000 jobs in February, with health‑care employment shrinking by 28,000 jobs after a wave of worker strikes. Despite the dip, the health‑care sector has added an average of...
Iran Conflict Deepens Fed Rate Split, Fuels Inflation Worries
Fed officials were already before divided the Iran war over what to do about rates. Now the conflict threatens to entrench those positions and make it even harder to reach a consensus "Both sides are going to be able to say...
Oil Spike Fuels Inflation, Keeps Fed From Cutting
The US-Iran conflict pushed oil past $100 a barrel. This is going to keep inflation elevated. Elevated inflation stops the Fed from cutting, which isn’t good for risk assets. I don’t see a super cycle this year only lower lows as stated many...
March Empire Fed Manufacturing Survey Index -0.20 versus 3.90 Estimate
The Empire State Manufacturing Survey slipped to a -0.20 index in March, well below the 3.90 estimate. New orders edged higher while shipments plunged, creating a mixed demand picture. Delivery times stretched and supply availability weakened, yet employment rose modestly...
Fed Expected to Keep Rates Unchanged at Upcoming Meeting
99% probability the Fed holds rates steady at the next FOMC meeting in 2 days https://t.co/McZZLqnIC5
US Growth Slows to Third‑Slowest in 14 Years
Last year, the US economy grew at its third-slowest rate in the last 14 years. https://t.co/RDFeuSRfcT
The Sacrifice Ratio Puzzle
Inflation surged to 9.1% in mid‑2022 due to pandemic disruptions and the Russia‑Ukraine war, then fell sharply in 2023 despite unemployment staying low. The traditional sacrifice ratio—unemployment needed to cut inflation—proved near zero, challenging Phillips‑curve expectations. Tariff hikes in 2025‑26...
Fed and FDIC to Vote on Trump-Era Basel Proposal Thursday
ICYMI: The Trump-era Basel bank capital proposal is coming Thursday, and the Fed and FDIC are having open board meetings at the same time to vote on it https://t.co/u34TWtDk8w https://t.co/TlK4sinLwp
Energy Price Surge Threatens to Reverse US Inflation Decline
For most of the past three years, falling energy prices have been helping to push the US inflation rate (CPI) lower. But that tailwind will soon become a headwind, with prices of Oil and Gas spiking on a YoY basis......
PS Quarterly Interview: Desmond Lachman
In a recent Project Syndicate interview, economist Desmond Lachman warns that President Donald Trump’s increasingly aggressive foreign policy could revive bond‑market vigilantes and destabilize the U.S. Treasury market. He argues that such stress may puncture the soaring AI‑related equity rally and...
35% Hike Odds in ’26, Certain November Rate Cuts
A 35% chance of a hike in '26 currently. 100% chance of three cuts back in November. Great chart from @sonusvarghese https://t.co/oAFz8G2I7j
Fed Must Erase 12% Excess Inflation Before Rate Cuts
The Fed should not even think about cutting rates again until the 12% additional inflation we've had since January 2020 above the 2% trendline is erased. There's no point in having an inflation target if you're not going to adhere...
It Was Unthinkable a Couple of Weeks Ago, but Could the Next Move by the Fed Be a Rate Hike?
The Federal Reserve’s March 18 meeting may break the recent easing trend as traders assign a roughly 25% probability to a rate hike, driven by a sharp oil‑price surge linked to the Iran conflict. Chief economist Carl Weinberg warns that...
Markets Stay Calm on 5-Year Inflation Outlook
Market relatively sanguine about longer term inflation. 5 year, 5 year forward inflation swap showing no angst despite crude elevating front short-term swaps https://t.co/b8Po5HE6EV
Warsh Delay Helps Him, Harms Powell Amid Oil Shock
“Interestingly, any delay in Warsh’s confirmation is a gift to Warsh and a curse for Powell as the Fed now faces the challenge of managing yet another supply side shock with a president that views rate cuts as the answer...
Instantaneous PCE Inflation with Nowcasts/Tracking
Goldman Sachs’ tracking model nudged its February core PCE inflation nowcast higher, while the Cleveland Federal Reserve’s nowcast suggests lower instantaneous inflation for February and March. The two estimates diverge because Goldman Sachs blends judgmental inputs with data, whereas the...
Manufacturing Slows, Housing Index Slightly Rises
Economic Calendar for Mon. Mar. 16 8:30am - NY Fed manufacturing index for March: Expected 3.9; Prior 7.1 10:00 - NAHB housing market index for March: Expected 37; Prior 36
Red Vs. Blue States' Income Tax Gap Widening
MyPoV: Numbers don’t lie. Red and Blue States Are Growing Further Apart on Income Tax https://t.co/QjUnqWilgL
Battle-Weary Fed Confronts Another Supply Shock
The Federal Reserve is confronting a new supply‑side shock that threatens to revive inflationary pressures as geopolitical tensions persist. Central banks are diverging, with Australia likely to raise rates again while Europe and the UK pause policy tightening. This split...
Central Banks Pause Rates Amid Oil, Middle East Risks
Central banks worldwide hold rates steady this week as they watch oil prices and Middle East tensions. The Fed's Powell leads his second-to-last FOMC meeting. 🟢 Open https://t.co/d9xKHu64X9
Living Costs Outpace Income Growth by Decades
Median family income in the US increased from $10,000 in 1971 to $106,000 today, only a 10x increase. However, the median cost of homes increased from $25,000 to $445,000, a 17x increase. And the median cost of cars increased from $3,600 to...
Democrats Propose Erasing Income Tax for Half of U.S. Workers
Senators Cory Booker and Chris Van Hollen introduced separate bills that would essentially erase federal income tax for households earning under $75,000, expanding the tax‑free income shield to as much as $92,000 for married couples. Van Hollen’s Working Americans’ Tax...
Alternative Fed Tightening Tools, Not Rate Hikes, Curb Inflation
FWIW while many are suggesting Fed Rate Hikes and markets are beginning to price that as well. We much prefer 1. Ending RMO 2. Addressing the uneven distribution of reserves by establishing a minimum reserve requirement to protect the high...
Central Banks Delay Hikes in Supply Shocks, Await Wage Inflation
The supply shock move in Energy prices, fertilizer prices, and food prices IS a Rate hike which slows the economy and is disinflationary to goods and services that are not energy and food. A dual mandate central bank doesn't hike...
The Iran War Is a New Test of America's Economic Superpower
Despite the Iran‑Iran war threatening oil flows through the Strait of Hormuz and pushing crude prices above $103 a barrel, the United States economy continues to show resilience. Recent data show unemployment at 4.4% and Q1 2025 GDP growth projected...
Promises of 5% Growth Ignore Looming Debt Reality
January 2025: "Don't worry about the $2 trillion deficit and the rising national debt. We are going to grow our way out of it with 5% Real GDP." Today: "Wait till next year." https://t.co/D1ZtfYxn0r
Government Claims 20% Health Insurance Cost Drop—Absurd
The most absurd number in CPI? According to the US Government, the cost of health insurance has declined 20% over the last 5 years... https://t.co/Iw2M0izZim
Pre-War/Conflict/”Excursion” GDP, Core GDP, and Nowcasts
The Atlanta Fed’s GDPNow nowcast for Q4 2025 shows a modest slowdown, trailing the Survey of Professional Forecasters (SPF) projection. Goldman Sachs, assuming a 21‑day Strait of Hormuz disruption, trims its growth estimate from 2.5 % to 2.2 % year‑over‑year. The SPF survey, collected...
Goldman Sees 25% US Recession Risk as Oil Hits $100
Goldman just raised US recession probability to 25%. Oxford Economics says $140 oil triggers recession in the eurozone, UK, and Japan. Brent is at $100 and the Strait of Hormuz is still closed. https://t.co/7yjIA43hkG
Regional Housing Markets Shape Inflation Perceptions
I’m convinced that a lot of people’s views on inflation right now are driven by whether they live in the Sun Belt (experiencing housing deflation/disinflation) or NY/SF.
Trump Seeks to Close $1.6 Trillion Revenue Gap with Raft of New Tariffs
The Trump administration is launching a series of Section 301 investigations and new duties to recoup roughly $1.6 trillion in tariff revenue lost after a Supreme Court ruling. The probes will examine 16 economies for excess factory capacity and dozens more for...
Stocks Typically Bottom Five Months Before GDP Rebounds
As recession fears mount, remember that stocks bottom ~5 months before GDP inflects. JPMAM https://t.co/R8swcw5iFp
Why a Fed Rate Cut Now Signals Trouble
My week ahead article: It Would Probably Be a Bad Sign if the Fed Cut Now – Here’s Why https://t.co/iRgDsoYaOg https://t.co/HWPl79e8Ez
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Federal Funds Rate Vs. LIBOR: Key Differences Explained
The Federal Reserve sets the U.S. federal funds rate, an overnight benchmark that shapes domestic liquidity, inflation, and employment. LIBOR, by contrast, is a London‑based multi‑currency benchmark derived from bank submissions and has long guided global short‑term lending. While both...
Oil Shock Resilience Masks Sectoral Strain on Airlines, Farms, Autos
The WSJ reports: "The U.S. economy is less exposed to oil shocks today than in prior decades." But, today’s economy shows strain in airlines, farms, autos. Airlines face soaring fuel costs. Farmers face higher fertilizer prices. Rising gas prices threaten US autos. https://t.co/bOpYCs0pCD
BLS and BEA Typically Announce Changes Well Ahead
BLS always tries to publicize these changes well in advance. I don't follow BEA as closely, but I assumed they did the same.
Treasury Yields Surge, Mortgage Rates Spike Amid Deficit Fears
Treasury Yields Jump, 10-Year to 4.28%, 30-Year to 4.90%, Mortgage Rates Spike to 6.41%, on Inflation & Deficit Fears. US Government sold $651 billion of Treasury securities this week into these rising yields https://t.co/PBjZjAGHme https://t.co/VXWtZ8bNKw
Trade on Macro Fundamentals, Not Noisy Economic Data
Don't stare at spot noisy reported economic data. Answer these questions at a high level. Directionally not precisely. Is the U.S. labor market healthy and labor is in demand Is the population growing Is the 6 month to a...
US Debt Costs, Not Iran, Pose Existential Threat
The biggest issue the US is dealing with right now isn’t Iran — it’s the cost of its own debt. Plain and simple: The government can’t afford a war at this stage, and higher interest rates are becoming an existential threat. https://t.co/mHVMQJMS82 https://t.co/yW1dmgDC7i