Morning Report: Awaiting the FOMC minutes

Vital Statistics:

S&P futures4,012 5.50
Oil (WTI)75.73-0.60
10 year government bond yield 3.94%
30 year fixed rate mortgage 6.64%

Stocks are flattish after yesterday’s bloodbath. Bonds and MBS are down.

The FOMC minutes will be released at 2:00 pm. We know that Mester and Bullard were considering a 50 basis point hike in February, so it will be interesting to hear if the members were more hawkish than the February press release suggested. Bullard recently said that he sees the Fed Funds rate rising to 5.375%, which presumably means that the terminal Fed Funds rate will be in a range of 5.25%- 5.5%. This comports with the June Fed Funds futures.

Despite the sturm and drang in the bond markets, the Fed Funds futures haven’t changed all that much. The March futures see a 79% chance of a 25 basis point hike and a 21% chance of a 50 basis point hike, while the December futures still see a range of 5%-5.25% as the most likely outcome.

The reversal in rates didn’t help mortgage applications last week. The MBA mortgage application index fell 13.3% as purchases fell 18% and refis fell 2%. The purchase index is 41% lower than a year ago, while the refi index is down 72%. “Mortgage rates increased across all loan types last week, with the 30-year fixed rate jumping 23 basis points to 6.62 percent – the highest rate since November 2022. The jump led to the purchase applications index decreasing 18 percent to its lowest level since 1995,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “This time of the year is typically when purchase activity ramps up, but over the past two weeks, rates have increased significantly as financial markets digest data on inflation cooling at a slower pace than expected. The increase in mortgages rates has put many homebuyers back on the sidelines once again, especially first-time homebuyers who are most sensitive to affordability challenges and the impact of higher rates.”

HUD is reducing the mortgage insurance premium for FHA loans. Supposedly the premium is falling from 115 to 85 basis points. This will help affordability issues for this Spring Selling Season, although high prices and rates will matter more.

Luxury homebuilder Toll Brothers announced earnings after the close yesterday. Earnings per share rose, while revenues were up 4%. The cancellation rate was surprisingly low at only 14%. Gross margins rose, so there is no evidence of price-cutting or promotional activity in the luxury home space.

“Since the start of the calendar year, we have seen a marked increase in demand beyond normal seasonality as buyer confidence appears to be improving. We believe the recent pick-up in demand is a sign that the long-term fundamentals underpinning the housing market remain intact. These include favorable demographic and migration trends, a very tight resale market, and growing pent-up demand resulting from over a decade of underproduction. Notwithstanding near-term uncertainty in the economy, we expect these factors will continue to support the housing market well into the future.”

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19 Responses

  1. May have to check this out:


  2. I’ve never understood the left’s absolute hatred for Michael Flynn. He was a pawn, ultimately, in the Russia Collusion hoax but he was in office for what, a couple of weeks? The outrage over Flynn and his family seems all out of proportion to any action, real or imagined he possibly could have taken.


  3. Boy, SXSW sure is edgy and not establishment at all!


    • women most affected


    • McWing:

      The framing of this article is hilarious.

      Indeed…I was quite surprised that it was actually written by a guy. This was particularly amusing:

      Women are tiring of their stereotypical role as full-time therapist for emotionally distant men.

      The actual stereotype is that women love playing the emotional therapist, and if they are “tiring” of anything, it is the fact that “emotionally distant” men (talk about a stereotype!) have no interest in playing the patient.


      • The supposed guy:

        Soy emanating from all of his pores.

        He is a fully plugged-in blue pilled beta.


      • I thought that line about women being therapists to socially distant men sounded familiar. It turns out it was pretty much lifted out of a Salon article highlighting the reaction to a Harper’s article about exactly the same topic…an article that we discussed fully 4 years ago! Not exactly original reporting.

        Last week, Harper’s Bazaar published a piece by Melanie Hamlett that spread quickly between women on social networks. “Men Have No Friends and Women Bear the Burden” read the headline, and those women sharing the article certainly agreed. “Willing to pay someone to take a physical copy of this story to every man I’ve ever dated and smack them over the head with it,” one tweeted. “I can’t even count the number of women I know who’ve gotten so tired of acting as therapist to the men they’re dating that they’ve given the ultimatum: Get a real therapist, or we’re done,” another added.


    • NMbRs R hARd

      The thing I thought was funny is that if most young men are single and most young women are not, then it must mean that a lot of these women who think they are attached are really just sharing some dude with other women.


      • The other point was that something like 25% of the broads identified as Bi. So they’re tormenting other women. Dudes are like, give me my videos games, free porn and an occasional trip to Phuket and I’m golden.


        • Passport bro lifestyle. I suspect a lot of dudes are going to leave this country. And why not? What is so great about being here anymore?


    • Milo called this ten years ago:

      “The Sexodus, Part 1: The Men Giving Up On Women And Checking Out Of Society”

      “The Sexodus, Part 2: Dishonest Feminist Panics Leave Male Sexuality In Crisis”


      • The funny thing is the left engineered this. Millennials and Gen Z were engineered by the left since birth.

        This is what they wanted, and they still bitch.


      • What strikes a lot of women as strange is how rational and systematic so much of this decision-making is by men. Many young men literally perform a cost-benefit analysis and decide that women aren’t worth the hassle.

        I call it the million dollar coin flip. Half of US marriages end up in divorce and women initiate 80% of them. If you make 100k you are out 50k for 20 years. A million bucks.

        It is a million dollar coin flip. Heads, you are no worse than you were before, Tails, you are out a million bucks.

        That is how I have explained it to my son and I am happily married. Needless to say, the Mrs. doesn’t approve.


      • seriously considering all-boys school for my soon to be high school freshman.


    • It is worth noting that men can just go to a country bar if they want to meet more traditional minded women.


  4. People noticing is the problem.

    Fucking rubes, go back to Dancing with the Stars!


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