Morning Report: No revelations in Humphrey-Hawkins testimony

Vital Statistics:


Last Change
S&P futures 2785.75 -5
Eurostoxx index 372.14 -1.55
Oil (WTI) 56.64 1.06
10 year government bond yield 2.63%
30 year fixed rate mortgage 4.34%


Stocks are lower this morning on no real news. Bonds and MBS are up.


Jerome Powell’s Humphrey-Hawkins testimony didn’t really reveal much in the way of new information. Here are his prepared remarks.  The Fed will be patient as it evaluates incoming data: “With our policy rate in the range of neutral, with muted inflation pressures and with some of the downside risks we’ve talked about, this is a good time to be patient and watch and wait and see how the situation evolves.” He didn’t volunteer too much information regarding balance sheet runoff other than to say the Fed is evaluating the timing. For the most part, the bond market didn’t really react much to the testimony other than to rally somewhat on his view that he doesn’t see much in the way of wage-push inflation. The message to the bond market: don’t freak out if you start seeing wage growth with a 3 handle.


Home prices rose 1.1% in the fourth quarter, according to the FHFA House Price Index. December was up 0.3% from November. The hot markets of 2017, especially the West Coast markets, have cooled substantially and are now experiencing appreciation more in line with the rest of the country. This chart probably understates the deceleration in the hotter markets, as the index only looks at loans with a conforming mortgage, which means it is only measuring the lower price points, which is where the strength lies. The jumbo market has been struggling.


FHFA regional


Mortgage Applications increased 5.3% last week as purchases rose 6% and refis rose 5%. Mortgage rates were little changed last week, but as we anticipated, homebuyers are responding favorably to this more stable rate environment,” said Mike Fratantoni, MBA Senior Vice President and Chief Economist. “Purchase applications for both conventional and government loans rose last week, with the government gain led by a 14 percent increase in applications for VA purchase loans.”


A Senate Panel voted to advance Mark Calabria to a full vote on the Senate floor. The vote was 13-12, straight along party lines. The industry applauded the appointment.


Both Zillow and Redfin have models to value homes – which one is more accurate? It turns out that if you look at listed homes, Redfin is the winner, with an error rate of 1.8%. However, for homes off the market, it rises to 6%. Zillow, who doesn’t break out on the market / off the market for its error estimates comes in around 4%. FWIW, appraisers consider an error range of 4% about accurate. Note though that these are median error rates. In newer subdivisions, where square footage and lot sizes are similar, the estimates will be pretty predictive of final sales prices. As the properties become more diverse the error ranges increase. Note that in MSAs like Chicago, the median error is 4%, but over 40% of all home sales are not within 5% of the final sales price.

9 Responses

  1. Another hate crime hoax falls apart:

    “A community rallied around a trans activist after his home burned. He’s now being charged with arson.

    By Kayla Epstein
    February 27 at 11:56 AM ”


    • of the hate crimes that end up getting resolved, what is the hoax / actual ratio? I suspect it is over 5


      • Brent:

        I suspect it is over 5

        Mine at 5, all day long.


      • I figure like 20 to 1? I would guess the ratio is a lot lower for unresolved hate crimes because it’s clear (and makes sense) that self-inflicted hate crimes are easier to solve because the person who did it is reporting it and will obviously be a person of interest, and the more dramatic or specific it is or the more newsworthy the more likely it is to be a hoax, and the guy or gal who did it also the “victim”. Then I assume some hoaxes are more personal than racial, so maybe resolved because of a known relationship. The hardest ones to resolve would be actual hate crimes done with intent by people unrelated to the victim in any identifiable way.

        How many of those there are I don’t know. I think “hate crimes” need to be done with the permission—for the most part—of the dominant culture. That is, it would need to be something the perp could brag about or take credit for or use to build a positive reputation. And would have to be damaging to the victim—not something they could use to become a minor celebrity and get plaudits from the media.

        My sense is that “hate crimes” should be fairly pervasive and done with the approval of half or more of the larger culture, and not routinely have beneficial outcomes for the victims. By the time something is legally and culturally considered a hate crime, real ones are going to be as rare as serial murders. That’s my theory, anyway, and I haven’t seen anything to disprove it.


  2. I always appreciate Taibbi calling bullshit on the MSM narrative about Russia & Trump:

    Liked by 1 person

    • Speaking of media malpractice, watch UK media hate-figure Tommy Robinson turn the tables on the execrable BBC. The whole thing is good and you need to watch from the beginning to get the set-up, but if you don’t have the time, skip ahead to 25:30 for the money shot.

      (h/t McWing, because the rest of the UK media seems to be trying to bury it)

      Liked by 1 person

    • I like Scara Palin’s response. Twitter should rebrand itself as “the home of completely missing the point”.


  3. Peak Vox:

    “The knitting community is reckoning with racism
    Fiber artists of color are taking to Instagram stories to call out instances of prejudice — and to try to shape a more inclusive future.

    By Jaya Saxena
    Feb 25, 2019, 8:00am EST ”


Be kind, show respect, and all will be right with the world.

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