Economy

Rates need to start pulling back soon. There are too many layoffs and consumer spending is ticking down. The housing market is still insane, but that's a supply and demand issue that interest rates won't fix.

 
ZRod said:
Rates need to start pulling back soon. There are too many layoffs and consumer spending is ticking down. The housing market is still insane, but that's a supply and demand issue that interest rates won't fix.
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Completely agree.  I actually think they need to come down pretty fast.

 
That's good news...I need a new deck, and the quotes 2-3 years ago were horrific.  Maybe getting a quote in the next 2 months or so will be more affordable.

 
Pretty mixed bag here.   Good signs of consumer spending continuing though offset by the amount of consumer debt being incurred.   Something has to give on those two fronts at some point.  
 

https://www.yahoo.com/finance/news/surprise-jump-retail-sales-casts-155022439.html

Earlier in the day, Walmart, the country’s largest retailer, reported stronger-than-expected earnings and lifted its forecasts for the rest of the year, citing continued consumer resilience.

“Everybody’s trying to talk down the economy but pay attention to what people are doing: They are increasing their spending. ” said Gus Faucher, chief economist at PNC Financial Services Group. “That’s an indication the economy remains solid.”

The upbeat reports, which came on the heels of an encouraging inflation snapshot this week, helped assuage investors’ fears of an imminent recession. Last week, the markets plunged on fears the economy was headed for a downturn following a dour July jobs report.

Although Americans emerged from covid flush with extra cash, they have more than burned through that money. A new report from the Federal Reserve Bank of San Francisco shows that, despite a spike in liquid wealth in 2020, U.S. households are now in worse financial shape than they would’ve been if the covid crisis hadn’t happened.

Middle- and lower-income households, for example, had about 13 percent less in liquid wealth at the end of March than they would have if pre-pandemic trends had continued, bank researchers found, adding that there’s also been a “notable increase” in credit card delinquency rates as people draw down their savings.

“Smaller financial cushions and heightened credit stress … pose a risk to future consumer spending growth,” the report found.

 
Archy1221 said:
Pretty mixed bag here.   Good signs of consumer spending continuing though offset by the amount of consumer debt being incurred.   Something has to give on those two fronts at some point.  
 

https://www.yahoo.com/finance/news/surprise-jump-retail-sales-casts-155022439.html

Earlier in the day, Walmart, the country’s largest retailer, reported stronger-than-expected earnings and lifted its forecasts for the rest of the year, citing continued consumer resilience.

“Everybody’s trying to talk down the economy but pay attention to what people are doing: They are increasing their spending. ” said Gus Faucher, chief economist at PNC Financial Services Group. “That’s an indication the economy remains solid.”

The upbeat reports, which came on the heels of an encouraging inflation snapshot this week, helped assuage investors’ fears of an imminent recession. Last week, the markets plunged on fears the economy was headed for a downturn following a dour July jobs report.

Although Americans emerged from covid flush with extra cash, they have more than burned through that money. A new report from the Federal Reserve Bank of San Francisco shows that, despite a spike in liquid wealth in 2020, U.S. households are now in worse financial shape than they would’ve been if the covid crisis hadn’t happened.

Middle- and lower-income households, for example, had about 13 percent less in liquid wealth at the end of March than they would have if pre-pandemic trends had continued, bank researchers found, adding that there’s also been a “notable increase” in credit card delinquency rates as people draw down their savings.

“Smaller financial cushions and heightened credit stress … pose a risk to future consumer spending growth,” the report found.
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 People are spending more due to necessities costing more. Not because the people buying crap at Walmart are "resilient consumers." 

Dirt bag millionaires with their heads up their arses can't seem to understand that. There is a reason fast food companies have missed forecasts and it's cuz people are cutting back where they can.

 
Born N Bled Red said:
 People are spending more due to necessities costing more. Not because the people buying crap at Walmart are "resilient consumers." 

Dirt bag millionaires with their heads up their arses can't seem to understand that. There is a reason fast food companies have missed forecasts and it's cuz people are cutting back where they can.
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I'm all for blaming dirt bag millionaires but the reality is that real wages are up and the median American has never had more buying power than right now. 

BigRedBuster said:
Completely agree.  I actually think they need to come down pretty fast.
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Man, I'm not sure. I think they'll slowly lower rates. I think a large drop in rates will cause housing prices to explode. Although the FED may realize that the supply/demand structure of housing is so out of whack that they kind of have to ignore it. 

I think we see one rate cut this year and maybe 4 next year but what do I know? 

 
Dr. Strangelove said:
I'm all for blaming dirt bag millionaires but the reality is that real wages are up and the median American has never had more buying power than right now. 

Man, I'm not sure. I think they'll slowly lower rates. I think a large drop in rates will cause housing prices to explode. Although the FED may realize that the supply/demand structure of housing is so out of whack that they kind of have to ignore it. 

I think we see one rate cut this year and maybe 4 next year but what do I know? 
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BigRedBuster said:
@Dr. Strangelove
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I would be beyond shocked if the FED lowered interest rates by 100 basis points by the end of the year. I can maybe see two 25 point cuts, but 100 points? I just don't see it. 

And this is sort of the issue. Housing prices have stayed extremely elevated despite high interest rates and improving inventory.

A sudden drop in interest rates of 1-1.5% by the spring buying/selling season will just cause another frenzy pushing prices to the stratosphere. Housing is just broken.

 
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