Claudia Sahm in the Financial Times (gated).
Sahms argues that the rise of 525bp in the Fed Funds rate in 2 years, while placing the housing market under pressure, is also squeezing prices higher as people who have low, fixed-rate mortgages are unwilling to sell. New buyers face
- higher mortgage rates
- high home prices
- a lack of homes available to purchase
Resilience in the rest of the economy is not a sure thing to continue. And credit markets and banks are under strain.
Sahm concludes:
- Its hard to say where the pockets of weakness are now. but the longer rates stay high, the more the Fed risks seriously damaging the economy.
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On Thursday we had the retail sales data from the US for January, very weak:
There were substantial revisions lower for the December and November retail sales data also. Cracks appearing?
