Morning Report: Richmond Fed President Tom Barkin is in no hurry to cut rates

Posted on February 9, 2024 by Brent Nyitray

Vital Statistics:

Stocks are higher this morning as earnings continue to come in. Bonds and MBS are flat.

The Consumer Price Index was revised downward slightly in December and the fourth quarter was unchanged.

Mr. Cooper reported fourth quarter earnings this morning. Funded volume fell 16% YOY and gain on sale margin fell slightly to 197 basis points. The servicing book is being valued at 155 basis points.

Richmond Fed President Tom Barkin is in no hurry to cut rates. The Fed is committed to returning inflation all the way to 2 percent. “As I think about that commitment, I can’t help but look to lessons from the past. History tells many stories of inflation head-fakes. For example, at the end of the Volcker era, inflation seemed to settle in mid-1986. The Fed reduced rates. But inflation then escalated again the following year, causing the Fed to reverse course. I would love to avoid that roller coaster if we can.”

Mortgage delinquencies increased to a seasonally adjusted rate of 3.88% in the fourth quarter, according to the MBA. This was up 26 basis points compared to the third quarter, but down 8 basis points year-over-year. “Mortgage delinquencies increased across all product types for the second consecutive quarter,” said Marina Walsh, CMB, MBA’s Vice President of Industry Analysis. “While the overall delinquency rate is still very low compared to the historical average, the pace of new loans entering delinquency picked up and some loans moved into later stages of delinquency. The resumption of student loan payments, robust personal spending, and rising balances on credit cards and other forms of consumer debt, paired with declining savings rates, are likely behind some borrowers falling behind at the end of 2023.”

Mortgage rates moved little last week, according to the Freddie Mac Primary Mortgage Market Survey

“Mortgage rates remain stagnant, hovering in the mid-six percent range over the past several weeks,” said Sam Khater, Freddie Mac’s Chief Economist. “The economy and labor market remain strong with wage growth outpacing inflation, which is keeping consumer spending robust. Meanwhile, affordability in the housing market is an ongoing issue due to continued high home prices, elevated mortgage rates and low supply of homes on the market, particularly for first-time and low-income homebuyers.”

Filed under: Economy |

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21 Responses

  3. jnc4p's avatar
    jnc4p, on February 10, 2024 at 12:25 pm said:

    Scott posted a new piece on the decision not to prosecute Biden:

    https://reasoninexile.substack.com/p/classified-insanity

    I think Trump (or an allied super PAC) should lean into it and make some bumper stickers and shirts that read:

    “Trump 2024 – At Least He’s Competent To Stand Trial”

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  5. jnc4p's avatar
    jnc4p, on February 11, 2024 at 2:33 pm said:

    Good quote of the day:

    “The President’s job—and if someone sufficiently vain and stupid enough is picked he won’t realize this—is not to wield power, but to draw attention away from it.”

    —Douglas Adams, The Hitchhiker’s Guide to the Galaxy, Fit the Ninth

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  6. jnc4p's avatar
    jnc4p, on February 11, 2024 at 2:51 pm said:

    Are they this ignorant or just flat out lying?

    Investigators found insufficient evidence to charge Biden for mishandling classified documents during his time as vice president

    https://www.politico.com/news/2024/02/11/poll-biden-too-old-for-another-term-00140852

    No, they found more than sufficient evidence. What they determined was that prosecution was ill advised due to the likelihood of Biden’s defense arguing that he wasn’t able to form the required criminal intent due to his deteriorating mental state.

    Homeland Security Secretary Alejandro Mayorkas similarly batted the report’s description aside.

    “The most difficult part about a meeting with President Biden is preparing for it, because he is sharp, intensely probing and detail-oriented and focused,” Mayorkas told NBC’s Kristen Welker during an interview on “Meet the Press.”

    One wonders if SNL will reprise their version of Reagan as the mastermind for Biden

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  8. Let the mutherfuker burn!'s avatar
    Let the mutherfuker burn!, on February 11, 2024 at 10:49 pm said:

    This made me laugh.

    https://x.com/sickoscommittee/status/1756842357343826281?s=46&t=vSGsUlnc4rLxcUf7zfUiHg

    also, I read that if Taylor stays with Kelce much longer, her next his song will be “He Does it Because he Loves Me”

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  12. jnc4p's avatar
    jnc4p, on February 12, 2024 at 5:06 pm said:

    Good Nate Silver piece on the economy and consumer sentiment.

    https://www.nytimes.com/2024/02/12/opinion/biden-trump-consumer-confidence-economy.html

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  13. jnc4p's avatar
    jnc4p, on February 13, 2024 at 12:04 pm said:

    Another good NYT voter round table. It’s always interesting how voter demographics and political sentiments don’t align with how progressives think they should.

    https://www.nytimes.com/interactive/2024/02/13/opinion/independents-biden-focus-group.html

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  15. jnc4p's avatar
    jnc4p, on February 13, 2024 at 1:16 pm said:

    Good piece on lesser known pictures of the Hindenburg.

    https://patrickwitty.substack.com/p/the-hindenburg-disaster

    Like

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  17. jnc4p's avatar
    jnc4p, on February 13, 2024 at 6:54 pm said:

    Brent you see this? The Biden administration issued a Medicaid waiver so that it can be used to pay rent.

    https://www.vox.com/2024/2/13/24064445/medicaid-rent-housing-homelessness-healthcare

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