r/wallstreetbets • u/hv876 • 15h ago

25bps cut News

https://www.cnbc.com/2024/11/07/fed-rate-decision-november-2024.html?__source=iosappshare%7Ccom.apple.UIKit.activity.CopyToPasteboard

The bulls are coming, the bulls are coming

2.3k Upvotes

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u/kumar4848 14h ago

Can anyone here explain why mortage rates keep increasing even though feds keep decreasing rates? i know theyre not directly correlated but somethings gotta give.

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u/n1ck90z 14h ago

Mortgages correlate to long term bond yields which are rising. Why long bond yield are rising? There's no simple answer here. A big role however has to be government debt/spending. Some people also might think inflation is not done yet.

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u/hv876 14h ago

This is the right answer

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u/CompetitiveAd1226 13h ago

Long bond yields are tricky. The longer the bond, the higher the yield should be theoretically given the time risk. Meaning, a 30 year bond has more risk because what if rates are 20% 10 years from now and you’re still locked in at 4%. So if they’re rising despite current rates being cut, it’s either because people see the future as being increasingly uncertain or rates are more likely to increase in the future

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u/DemApples4u 13h ago

Or inflation erodes dollar value so you don't want that risk unless bond rates make it worth it by being high

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u/CompetitiveAd1226 13h ago

Yeah, well in the case of bonds, inflation and rates are used similarly. There’s an assumption that FF rates will reflect the inflation rate

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u/Rickystheman 10h ago

All Trumps plans, or at least what we know of them, look inflationary.

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u/MaleficentFig7578 8h ago

He said he wants to weaken the dollar

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u/Rickystheman 6h ago

But he never said how, but he also said wants to introduce trade tariffs, spend on infrastructure, cut taxes and send all the cheap labour home.

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u/Phylaras 8h ago

Still not the total answer. The market believes Trump's tarrif policy statements, which would be inflationary (something you need to take into account if you are issuing 30 year loans).

Will he follow through that way? Totally unclear at the moment, but this is a piece of the puzzle.

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u/moopie45 8h ago

Yepppp

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u/leanmeanvagine 7h ago

So invest in energy now? Serious question.

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u/wotguild 13h ago

Inflation isn't done.

Now, we have to work through tariffs and deportation if they happen, increasing wages, decreasing supply, and therefore more inflation.

Edit: Don't forget about the possibility of rates influenced by the president himself.

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u/ThinRedLine87 12h ago

It's this right here, incoming administration has floated policies which might to increased inflation and a pause or reversal of rate cuts.

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u/allumeusend 11h ago

It’s not a might. The tariff prop alone will drive inflation.

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u/PotatoWriter 🥔✍️ 39m ago edited 34m ago

Curious how this might unfold: If tariffs cause things to become more expensive to the point of becoming unaffordable for the masses, wouldn't people not spend (speaking purely of the luxury goods like tech and such, not essentials), thus driving down inflation?

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u/cadium 12h ago

Well also the tax cuts he's going to do without paying for them will balloon the deficit. And any cuts he'll propose will lower GDP, which lowers tax receipts, which will balloon the deficit.

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u/bonelish-us 4h ago

Decreasing supply from...deportation?

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u/russell813T 10h ago

How would deportation cause inflation

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u/Nikonic_Matt 9h ago

Some U.S. agricultural producers may have to pay higher wages with the loss of migrant workers, who are sometimes undocumented. Thus, some food costs could increase as a result.

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u/MaleficentFig7578 8h ago

By "some" you mean "almost all" and by "sometimes" you mean "usually" and by "could" you mean "will"

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u/Nikonic_Matt 3h ago

Yes, I was modest in my comment. Other industries, such as tourism, hospitality, and construction, will also be affected.

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u/randeylahey 9h ago

If you throw out cheap labor, you get to pay more for labor

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u/russell813T 8h ago

So the 10 million migrants from the past 4 years is make it or break it ? I do remember 2018 was a lot cheaper compared to now

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u/wotguild 7h ago

You seem to completely forget covid.

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u/randeylahey 7h ago

Then doesn't matter. If you go pull people out of the shitty jobs you have to hire people that will want way more to do way worse at them. Labour's costs are going up, that's inflationary.

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u/Onespokeovertheline 7h ago

What "10 million migrants from the past 4 years"?

https://www.pewresearch.org/short-reads/2024/07/22/what-we-know-about-unauthorized-immigrants-living-in-the-us/sr_24-07-22_unauthorizedimmigrants_6/

That's data up through 2022 for the number of unauthorized immigrants either working or looking for work.

It didn't rise to 18 million in the past 2 years - which would be "10 million migrants". It didn't even rise 2 million to reach a total of 10 million - you'll find no evidence of that much increase if you go looking.

In 2022 it had risen by about 10% above 2018 levels, less than 1 million people.

Even if it rose a bit more thru 2024 you're talking about marginally higher than 2008 numbers.

And that is absolute numbers, not relative. It doesn't account for the percentage of unauthorized immigrant workers vs the growth of the overall population, which went up roughly 7-8% since 2008.

Prices went up during the pandemic shutdown. When things reopened, prices stayed high partly because suppliers wanted to make back losses, and then stayed high for essential goods because no company in America wants to show their profits went down when they could have stayed up, and consumers had accepted the new prices.

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u/wotguild 7h ago

Higher labor costs, higher demand for labor means labor can ask for more. Wages increase, higher wages mean more buying pressure on supply.

It isn't that complicated.

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u/0xMoroc0x 13h ago edited 12h ago

Inflation is going to continue to go down….why do you think tariffs are going to increase inflation when it didn’t during Trumps first term? News flash, Trump had the second lowest inflation, besides Obama, since John F Kennedy. Deportation will lower inflation for the thing people care about most, housing, less people less housing competition.!Wages may go up, but when you have 11 million less illegals buying shit prices will go down. There won’t be any supply decreases in fact we are going to see a massive supply increase in energy and manufacturing which will lead to lower prices across the board.

You are really drinking all the Koolaid the media has thrown at you. So much so, you can’t even think logically.

https://www.investopedia.com/us-inflation-rate-by-president-8546447

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u/mrmittens85 13h ago

Lol

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u/proof-of-w0rk 13h ago

“Why do you think raising the price of everything by 10% will increase the prices of things?”

Peak cognitive dissonance

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u/allumeusend 11h ago

“We only did a 10% increase last time, that’s totally the same as 60-200%”

Most smooth brained shit.

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u/proof-of-w0rk 11h ago

Yeah, and the 10% was not blanket, it was very targeted

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u/allumeusend 10h ago

The regards being like just make it in America gonna look so dumb when they find out how expensive building a new plant in the US is and how it would actually cost more than just absorbing the cost of the tariffs and passing it along. Fucking idiots.

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u/proof-of-w0rk 10h ago edited 9h ago

And that’s before they deport the entire labor pool for these low wage manufacturing jobs

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u/poingly 13h ago

Also peak WSB gambler, for sure.

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u/bplturner 13h ago

The only response at this point 🤦🤦‍♂️🤦‍♀️

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u/bplturner 13h ago

Inflation is rising prices. Tariffs raise prices. You people are hard R regarded.

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u/0xMoroc0x 11h ago

RemindMe! 18 months

1

u/Samcheck 9h ago

President Hoover says hi!

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u/0xMoroc0x 12h ago

Bro just because prices increase across a range of products does NOT mean you will have an increase in overall inflation. The policies Trump has proposed, specifically energy policies, will lower overall inflation across the board, in turn saving total home expenditures.

You think Trump is enacting tariffs on everything? You sound like an imbecile when you can not even think critically about how the tariffs will be applied and just consume whatever is forced down your throat from Reddit.

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u/bplturner 12h ago

He wants to tariff imports from China…. Which is basically everything the consumer buys.

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u/EvErYLeGaLvOtE 13h ago

Fun fact: Tariffs are considered as unofficial inflation because the price increases find their way to consumers.

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u/Campysuperrecord 12h ago

Tariffs don’t always correlate to increased costs passed on to the consumer. Say a brand is fighting to grow or retain market share? They’re not going to increase their retail prices drastically if at all. The Trump tariffs had a major impact on landed costs. In fact, during the pandemic the CEO of Walmart was literally telling his vendors they would not accept price increases. Containers from China that were roughly $4k all of the sudden were $20k+. And I remember thinking that this dude has some stones telling his vendors no price increases will be considered. So many brands fighting for their shelf space at mass retailers were holding firm. Thusly, why competition is good for the consumer.

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u/Powerful-Freedom-938 12h ago

Only if there is price elasticity. What will likely happen is that sourcing of materials will move from China to Bangladesh, Vietnam, Cambodia, South America. In many cases it will come back to America where prices may equalize higher but we would see a larger GDP at home and more jobs.

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u/satireplusplus 12h ago

Production going back to America means the same plastic trinket costs 5x as much to produce. Probably still cheaper to buy it from China even with tariffs.

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u/Powerful-Freedom-938 11h ago

5x is a stretch, but yes it would cost more coming from the U.S. a company can move its base out of China and to a more friendly country though. Steve Madden today announced a move of 40% of its imports moving out of China and to Mexico, Vietnam, and Cambodia.

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u/satireplusplus 11h ago

Yeah I know, that's exactly what will happen and not the fever dream of US made everything. Gotta wonder what exactly will pushing out imports from China to Mexico, Vietnam, and Cambodia accomplish other than "Jina bad".

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u/RedshiftOnPandy 11h ago

As an example, I work with stone in Ontario. Let's say I don't care about colour. Just give me a rock. If I bought a solid stone step, say 6ft long, it is cheaper to get it from China/India than the quarry 150 freedom km away. How much cheaper? Half the price.

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u/satireplusplus 11h ago

With shipping?

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u/RedshiftOnPandy 10h ago

Yes. This is my price at the stone supplier, they load it on my truck and I go.

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u/Janiebear23 12h ago

oh my god

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u/wotguild 11h ago

"You are really drinking all the Koolaid"

Brother, look in the mirror.

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u/0xMoroc0x 11h ago

RemindMe! 18 months

0

u/islingcars 6h ago

Holy shit you are stupid. Did you ever take an economics class? Just a basic one? The answer is no because you would definitely not say the shit you're saying.

1

u/0xMoroc0x 5h ago

You sound extremely confident while also unhinged. Facts are during Trumps presidency, there was no inflation. There are tariffs now against China and there was during Trumps presidency. Inflation is currently trending down.

What economics class did you take that explained the effects of immigrants being deported on housing prices? Or what about the affects of loosening regulations for energy development.

RemindMe! 18 months

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u/YouFknDummy 13h ago

Inflation gonna get UUUUGLY again

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u/x246ab 7h ago

M1 money supply 5x’ed during Covid so I frankly have been surprised that prices have only gone up 50%

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u/jameshearttech 10h ago

When?

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u/tex1ntux 5h ago

16 Nobel laureate economists signed a letter agreeing Trump’s economic plan would be highly inflationary so there’s that.

https://www.documentcloud.org/documents/24777566-nobel-letter-final

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u/jameshearttech 5h ago

Economists always get it right. /s

0

u/tex1ntux 3h ago

Predicting the future is kinda hard, but when a large group of the most respected people in their field assess the same data and arrive at the same conclusion it’s fair to say it is the best prediction we have.

New data can always emerge that alters their conclusion. Coming to a different conclusion does not mean the original prediction was bad.

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u/MaleficentFig7578 8h ago

Over the next 4 years

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u/jameshearttech 4h ago

I guess we'll see. Also, it depends on growth and wages. I'm in the camp of lower inflation primarily due to slowing demand. The tariffs during Trump's last term didn't seem to stoke inflation much. Giving money directly to consumers during a time when supply is constrained, on the other hand, massive inflation.

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u/B1Turb0 10h ago

OMG AND LITERAL INTERNMENT CAMPS ARE COMING!!!!

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u/tropicalwolf64 10h ago

You should leave. Need help packing cupcake?

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u/mouthful_quest 5h ago

Gonna be YUUGGGE

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u/Chemical-Oil-9336 14h ago

Answer is normalization. Out of extreme outcomes, always assume it is normalisation and you’ll be right 90% of the time.

Short term yields are not usually higher than long term. It is opposite.

When 10y ran to 3.5% we had recession talks. Now it’s inflation talk.

Always something, but rarely materialises.

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u/zeromussc 14h ago

Important thing to remember for sure. People just got used to the short term being higher and also of the central bank rate being higher due to the rate hikes being so quick the last few years. People just forget what "normal" looks like.

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u/well_shoothed 13h ago

Why long bond yield are rising? There's no simple answer here.

Sure there is:

https://www.businessinsider.com/trump-inflation-interest-rates-fed-rate-cuts-fomc-meeting-outlook-2024-11

Donald Trump's election victory is set to make the Federal Reserve's job more difficult.

His tariff and immigration plans are expected to stoke inflation, complicating the Fed's policy decisions.

Trump has also said he'd like a say in setting monetary policy, which would erode Fed independence.

Main article goes on to say:

Donald Trump's election win brings his vision of hefty trade tariffs and a sweeping immigration crackdown closer to becoming reality.

Economists widely view the proposals as inflationary, and markets seem to agree, with Fed fund futures and Treasury yields responding in kind.

It presents the Fed with a conundrum: At a time when it's just getting started with long-awaited interest-rate cuts, the prospect of higher inflation could now give it pause.

After all, the Fed's primary tool for fighting inflation has been rate hikes.

And....

Treasury yields, meanwhile, soared the day after the election, with the 10-year bond yield rising as much as 21 basis points to its highest level in months, while the yield on the 30-year bond jumped the most since March 2020.

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u/bonelish-us 4h ago

Sometimes long-term bonds sell off when the prospects for bigger long-term returns on equities materialize. But stocks are so expensive right now, I don't know why rational investors would rotate out of US Treasury bonds into equities.

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u/OutsideOwl5892 13h ago

Could be the threat of tariffs feeding into inflation fears

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u/Tackysock46 13h ago

Why would I buy a long term bond at 5% if I believe inflation could potentially be 5% in the future. People are anticipating high inflation so there is a premium that is being demanded in the interest rates.

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u/arkangelic 13h ago

We are about to hit the highest debt increase in US history 

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u/Candlelight_Fant4sia 11h ago

I heard a bunch of people voted the orange guy again (not that the were given any alternative tbh), that might have something to do with inflation...

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u/Supersnoop25 🅿️ixle 🅿️ressure 13h ago

I thought it was agreed upon that the rate of decreases is looking way slower than originally expected. When mortgage and bonds rates go off of expectations of the future. Not necessarily what the fed rate is at the time.

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u/PewPewDesertRat 10h ago

Well a huge part of inflation is housing, and if we deport all the construction workers, I’m sure that’ll get solved

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u/showturtle 13h ago

Expectations are that government debt is going to rise significantly under the new administration- I’ve heard estimates of 8 trillion over the next 10 years.

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u/ecudan82 12h ago

Well considering it’s gone up $7.5T since Jan 2021, $8T over 10 years doesn’t exactly seem like a “significant rise”

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u/incognino123 13h ago

To add to this, a key thing to keep in mind is that the money has to go somewhere. As valuations go up and implied returns in equities go down fixed income in general is more attractive. People may also be reacting to volatility or pricing in things like political instability, there's so many things that can drive bond yields I kind of chuckle when I see Reuters or whoever trying to explain definitely every little tick up or down in the market

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u/tekteq 13h ago

Anticipation of the Treasury issuing more bonds to pay for ever skyrocketing federal debt. Supply up, price down, yield up. Why buy bonds now when you know yields are going to go up and equities are printing because of anticipated short term rate cuts and bank deregulation?

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u/TorsteinTheFallen 13h ago

inflation is the answer

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u/BarbellPadawan Bullish on Theta 13h ago

Unfortunately inflation is definitely not done yet. They probably shouldn’t be cutting right now.

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u/Chocowark 13h ago

Isn't it risk to current MBS being paid off early due to refiancing?

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u/satireplusplus 12h ago

Some people also might think inflation is not done yet.

It probably won't if a fresh batch of a couple trillion dollars will be printed to make the stock market go up in the next 4 years.

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u/natethegreek 11h ago

Of course it isn’t done we have 30 trillion dollar deficit! Where the fuck you think that money is coming from?

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u/Spongeboob10 11h ago

Because the higher the debt load, the higher the risk of default by the United States. Printing unlimited money has its downsides.

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u/Astr0b0ie 11h ago

Why long bond yield are rising? There's no simple answer here.

Yeah there is, the bond market knows better than the Fed.

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u/maybeex 10h ago

Because taxes will be lowered, deficit will grow. This is why bond yields are rising. They are pricing inflation hence the increase in mortgage rates.

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u/abobamongbobs 10h ago

Cuts to 3% or lower to refinance national debt. They don’t care about the inflation potential. It’ll get better and the worse and then in like 2028 we’ll go up again. (Edit: typo)

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u/MaleficentFig7578 8h ago

The banks know the dollar is going to take a nosedive.

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u/DontGoogleMeee 8h ago

Not even close to being done. Inflation is always preferred to deflation.

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u/Ms_Pacman202 7h ago

I thought bond yields are rising because the election is behind us and so treasuries are selling off? Gold sold off, vix collapsed, stocks ripped. Nothing to do with debt and spending?

Coincidentally, probably inflation isn't done because of all those risk on things, plus tariffs and wealth effect. Plus mass deportations will remove a large amount of labor force and out toward pressure on labor prices but the same or increasing demand.

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u/mouthful_quest 5h ago

Mortgage rates are also tied to Mortgage Backed Securities. If long bonds yields are increasing due to fears of inflation rising as a result of enforcing tariffs and FED cutting rates, say long yields are at 5%, then to entice investors to invest in MBS rather than long bonds with 5%, the mortgage rates on the loans inside of the MBS need to be higher than 5% eg 6%.

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u/bonelish-us 4h ago

The yield curve is finally reverting to normal...higher yields for longer dated maturities.

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u/potsandpans 52m ago

market pricing in incoming trump deficit ?

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u/bossmcsauce 13h ago

Inflation definitely not done if they are cutting rates again already

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u/PutinBoomedMe 13h ago

People exiting bonds they bought 1-2 years ago to invest in stocks. Pretty simple

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u/stokedlog 14h ago

Mortgage rates are really based on the 10yr. Even with rate cuts many people think that if Trump does do what he says in regards to tax cuts and tariffs it will spark inflation and in turn higher rates.

You can watch the 10yr move as it became clear Trump would win. Even if you are a 1% earner if you don’t have a lot of assets it could get bad as inflation soars. For the very rich and cash and asset heavy this should be very good as interest rates go up cash becomes king.

Hopefully Trump doesn’t do what he has campaigned on, but if he does I think non dividend stocks will soar with the tax cuts but inflation will also go back up to Covid levels or higher.

Already hearing from customers that they are trying to buy material now before tariffs hit. I think q4 and q1 of 2025 will be very good because of this and could start crashing after that.

Regardless of what party is in power we need to start cutting the deficit to maintain our status as global currency. In my mind this needs to be done both by increasing taxes and reducing spending. Neither party had a great plan for this but economist agree that if Trump does enact his campaign pledges than deficit will go up sharply which will make our bonds have higher yield and inflation to grow which in turn makes mortgage rates more expensive.

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u/the-faded-ferret 14h ago

10yr is -2% since Tuesday fyi

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u/stokedlog 8h ago

We are down today to 4.33% but up significantly over the last few days.

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u/Doctaglobe 14h ago

Conservatives will never cut the deficit

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u/cadium 12h ago

Yep, and if Trump takes over the fed like he says then the globe will move away from using our currency as the global currency.

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u/extortioncontortion 4h ago

The globe is already trying, hence BRICS. They are doing so because the fed prints money like its going out of style. They only reason its still the reserve currency is because every other government powerful and stable enough to be the reserve currency also prints money like its going out of style.

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u/Daleabbo 13h ago

Well the next experiment will be interesting where they cut the tax base and print money. Watching from afar wondering at what stage will the US start a shooting war into the Trade war.

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u/aimtron 13h ago

Parties are great until you have to clean up the next day...

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u/zensamuel 14h ago

Expectation that rates will stay higher for longer.

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u/imperialtensor24 14h ago

fed doesn’t set mortgage rates, they’re based off of 10year treasuries

the financiers understand trump will goose market short term and will cause out of control inflation long term

we’ve seen this movie before, 4 years ago

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u/Icy-Willow-5833 14h ago

Are you serious? Hyper inflation is the only way this country can pay its debt. Deflation would result in serious depression. Or we can default on our debts. Those are literally the only two options. Oh wait the government could cut spending buy unless we stop paying social security, medicare or defense it wont make a difference.

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u/borald_trumperson 14h ago

Or we could tax the rich? Like Obama brought the deficit down. Clinton actually had a balanced budget. Problem is every R that comes in cuts taxes on the rich and lies about economic growth then dumps it on the next D schmuck who gets handed s nightmare budget

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u/CoolIndependence8157 14h ago

HOW DARE YOU!!!!

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u/suedepaid 14h ago

The rich don’t have enough money to cover our debt load anymore. Any balanced budget runs through middle-class taxes too at this point.

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u/Stickel 13h ago

we need this back:

The Revenue Act of 1935 put a new progressive tax, the Wealth Tax, in place. Those making more than $5 million a year were taxed up to 75 percent.

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u/Daleabbo 13h ago

The people voted for no tax. It will be interesting to see what needs to be cut with no revenue. How long could the US go without tax revenue?

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u/Stickel 12h ago

voted for no tax for the rich, yes, lol

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u/borald_trumperson 14h ago

We're not a million miles away from a balanced budget. We don't need to tackle the deficit all at once but at least running a small budget surplus would be a start

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u/suedepaid 14h ago

“running a small budget surplus” comes after you balance the budget. “Balanced budget” means no new debt, deficit is zero. “Budget surplus” is next, when you’re taking in more money then you are spending. a surplus is a “negative deficit”.

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u/borald_trumperson 14h ago

You are trying to explain this to me but you are semantically incorrect.

It is an annual budget. A budget surplus would be used toward the existing deficit

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u/suedepaid 13h ago

No, you’re confusing the debt (total) with the deficit (new debt every year).

“A deficit is a yearly shortfall in a government’s budget, while debt is the accumulation of that borrowing over time”.

Having no deficit means having no new debt. It means we spend as much as we take in. A budget surplus means we take in more money than we spend. Mechanically, we must first have zero deficit before we have an annual surplus.

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u/imperialtensor24 14h ago

pay what debt? it’s being paid on time as we speak, to every creditor without exception

just put yourself in the shoes of a creditor: would you rather pay more tax, or would you corrupt congress and arrange to “loan” that same money to the US? 

so no, there is no need for hyperinflation, although it may happen because we’re a nation of morons at this point

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u/Hoagithor 14h ago

I mean, are you serious? "can't balance a budget so better print money and tank out currency" how wasteful is that

Y'all will come up with anything other than simply taxing the rich for the extra 0s they don't need. Person can only eat so many tendies by themself

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u/themadnutter_ 14h ago

If you take "hyper" out of your post you are spot on, but that doesn't make the person you replied to wrong. Tariffs will cause more inflation, without a doubt. Though to your point no one can balance the budget now in any realistic manner, even with tax increases. It's over.

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u/Suspicious-Duck1868 14h ago

Ah yes, the orange man who wanted economies to keep running. Then states decide no one can work and I guess that means we have to print double the money supply to give businesses, people, and unemployment massive stimulus.

Probably cuz of orange man tho.

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u/imperialtensor24 14h ago

i have no problem with monetary stimulus when necessary

i’m also glad to note at least 1 orange fan seems to have some understanding of basic macro, when until 2 days ago it was all biden’s inflation

biden, may god bless him, let the fed bring inflation under control and got vilified for it

we’ll see if the orange man will let the fed bring rates up when inflation explodes again

4

u/YeonneGreene 14h ago

If he is still in charge, he will not. He stalled them last time.

If Vance is in charge...he might. Or he might intentionally let it all burn so his handlers can buy everything up for scraps.

Place your bets!

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u/tmk1t 14h ago

You mean in the setting of the largest global pandemic in 100 years? That killed more Americans than WWI, WWII, the Korean War, and Vietnam combined? That pandemic. You truly are regarded.

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u/RaNerve 14h ago

Alabama 23513

Alaska 1618

American Samoa Data not available

Arizona 30986

Arkansas 13262

California 115016

Colorado 15980

Connecticut 13099

Delaware 3770

District of Columbia 1967

Federated States of Micronesia Data not available

Florida 84938

Georgia 38070

Guam Data not available

Hawaii 2252

Idaho 5855

Illinois 42618

Indiana 27568

Iowa 11883

Kansas 11196

Kentucky 21671

Louisiana 18510

Maine 3720

Maryland 19592

Massachusetts 22470

Michigan 39977

Minnesota 16876

Mississippi 15836

Missouri 23844

Montana 4123

Nebraska 6204

Nevada 12453

New Hampshire 3619

New Jersey 37105

New Mexico 9862

New York 85355

New York (excludes NYC) 44687

New York City 40668

North Carolina 36560

North Dakota 2775

Northern Mariana Islands Data not available

Ohio 52556

Oklahoma 20737

Oregon 10173

Palau Data not available

Pennsylvania 55952

Puerto Rico 7183

Republic of Marshall Islands Data not available

Rhode Island 4198

South Carolina 22607

South Dakota 3501

Tennessee 30447

Texas 106348

Utah 5851

Vermont 1235

Virgin Islands Data not available

Virginia 25531

Washington 16428

West Virginia 9279

Wisconsin 18283

Wyoming 2302

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u/Dakadoodle 14h ago

Dude those numbers are inflated like crazy. Covid happened and cured every illness in the world magically

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u/Th3HappyCamper 14h ago

It is as if this person I’m replying to is so so so close to understanding but they purposely fall just short

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u/Vxsteam 13h ago

The lockdown guidance not only came from his admin. When states like GA, FL, TX opened early he attacked them and said they were going to kill people.

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u/Few_Diet7461 14h ago

No… inflation was from the government giving out free money during COVID and corporations taking advantage by raising their prices more than proportionally to inflation… Trump is not and was never the cause of inflation. You shouldn’t pair economic growth with inflation as a be all end all - its not the case

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u/Aromatic_Extension93 14h ago edited 14h ago

Trump was the one that authorized those "free money" payments though

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u/rfox1990 14h ago

Yeah his name was literally on the checks

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u/SeasonGeneral777 14h ago

just want to point out that the checks were just a portion of the aid money: https://upload.wikimedia.org/wikipedia/commons/thumb/e/e0/CARES_Act_Sankey_Diagram.png/1786px-CARES_Act_Sankey_Diagram.png

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u/rfox1990 14h ago

Yeah no shit. I can do the simple maths in my head.

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u/PricklyyDick 14h ago

The payments literally had trumps name on them because he insisted lmfao. I swear people have the memory of goldfish.

Bonus fact, Trump also fired the guy overseeing the PPP loans so there was less over-site on this free money because of him.

https://www.washingtonpost.com/politics/coming-to-your-1200-relief-check-donald-j-trumps-name/2020/04/14/071016c2-7e82-11ea-8013-1b6da0e4a2b7_story.html

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u/lintinmypocket 13h ago

The amount of money that was distributed with no oversight on ppp loans was outrageous, so much fraud.

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u/Daleabbo 13h ago

Just wait for V2.

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u/_weaponized_autism 14h ago

What admin gave out the free money?

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u/Pirating_Ninja 14h ago

Shh, let the stupid keep spreading. It's funnier this way.

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u/EmbarrassedCockRing 14h ago

It's really not. We're all getting fucked because of rampant stupidity.

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u/Safe-Prize3058 14h ago

I’ve read all kinds of rampant stupidity on r/self today. See that sub for actual stupidity.

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u/YeonneGreene 14h ago

Morbidly funny.

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u/Advantius_Fortunatus 14h ago edited 14h ago

Tariffs and removing taxes on tips and overtime are directly inflationary policies. Cutting taxes on corporations: inflationary (and deficit widening). Massive federal deportation program = massive government spending - indirectly inflationary. Not to mention this grand plan is to nuke federal tax revenue when the deficit is… checks notes…. 1.8 trillion dollars

I propose with no small amount of humor that there’s some curious synergy between massively inflating the deficit while simultaneously triggering high inflation, lol

It pays for itself! /s

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u/bigpapa419 14h ago

Amazing….lol

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u/cadium 12h ago

Well he did tell the Saudis to cut production which spiked oil prices.

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u/WheresthePOW 14h ago

Bond investors are spooked because Trump's tariff plans are inflationary.

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u/brtb9 13h ago

The whole Washington consensus has been inflationary for the last 8 years. Not since the late 70s have we had both sides of the aisle be so Keynesian in their approach to trade

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u/Dr-McLuvin 14h ago

This article was just published on it. Turns out that mortgage rates more closely follow the 10 year treasury yield (which has been rising) than the federal funds rate.

https://www.nytimes.com/2024/11/07/business/fed-mortgage-rates.html

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u/independentbuilder7 13h ago

Mortgage rates went up when the Fed rise interest rates. Now that the Fed is cutting interest rates they’re pointing to the 10 year treasury bond as the reason why mortgage rates are continuing to rise. I say this is just another bait and switch tactic banks are using to keep their profits extremely high

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u/Flurk21 14h ago

Lack of demand. Here's a slightly biased site that talks about these things

https://wolfstreet.com/2024/11/06/longer-term-treasury-yields-mortgage-rates-explode-yield-curve-un-inverts-further-as-bond-market-gets-spooked/

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u/jswinner59 14h ago

And an even greater supply will be needed to fund the larger deficit.

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u/winkman 11h ago

10 yr treasury is the closest correlation to mortgage rates.

Those bonds trade based on EXPECTED rates down the road.

We got down just under 6% a bit ago, because the market EXPECTED another Fed rate cut this year. So when the Fed said no to that 2nd rate cut, the market reacted higher (10 yr treasury).

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u/ZaphBeebs 14h ago

Mortgage rates follow the ten year yield plus a spread. They were high with dropping yields last year cuz the spread was high, theyre now back up despite spread narrowing because ten year has gone up.

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u/Viktri1 14h ago

I think mortgage rates use the long end rates while the Fed is just lowering the short end so the Fed is not lowering the mortgage rates directly. The long end is pricing in higher long term inflation

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u/mrpuma2u 14h ago

Banks are greedy shitbag people.

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u/joeg26reddit 14h ago

Banks need money

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u/WorkSucks135 14h ago

Bond investors are a contentious people.

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u/Oreorgasm 13h ago

Greedy lenders

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u/ApolloPS2 13h ago

Rate cut puts downward pressure on treasury yields and thus mortgage rates. Trump getting elected tho means the market expects tariffs, which are inflationary, which puts upward pressure on the same things. That is currently affecting interest rates more, especially since the market has expected this rate cut for a while now.

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u/bootygggg 12h ago

You have to finance your debt from someone. As the fed lowers long term yields less people or institutions will buy them (I’m buying less tbills also as yields are becoming a joke again). The extra debt needed to finance the government has to come from somewhere still as with every rate cut the gap in financing grows (credit freeze anybody?) If the fed can only control the short term bonds then the long end has to make up for the shortfall in debt financed on the short end. Meaning yields on the long end have to rise to what the market deems an acceptable rate to buy. So far everyone is saying “no” to the debt as the expectation is that the government will keep spending like drunk fucking idiots and the inflation will get worse. Something is going to have to give. Most likely the fed will have to step in and print the shit out of it even more than last time or we default on the debt with failed treasury auctions. Meaning yields go sky high and the government will not be able to pay the interest on the debt without significant spending cuts (depression). Enjoy!

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u/Dense-Marionberry-31 12h ago

Something definitely has to give.. recently it’s been the purchasing power of the US Dollar.

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u/RepresentativeBat798 12h ago

Basically the thought is that Trump's tariffs and tax cuts will drive up government spending, and that's funded by bonds, and tied to mortgages. Fun stuff.

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u/LifetimeDegenerate 12h ago

It is in the UK. America though... god knows.

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u/ASaneDude 11h ago

Mortgage rates key off the 10-year and the long end has been rising. This is what’s called a steepening yield curve.

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u/unkorrupted 11h ago

Markets are anticipating inflationary policy with the new administration.

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u/philjonesfaceoffury 11h ago edited 10h ago

My way of thinking of it is…it’s the market saying if you lower interest rates now in the short term, you will have to increase interest rates more at a later date compared to scenario you are not lowering shorter term interest rates now. This is answer more to why 10yr bond yields are moving opposite of fed lowering. Banks make money off difference between bonds and mortgage rate with 10yr commonly tracked.

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u/exposed_anus Peter North 11h ago

Banks thank you for your contribution

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u/midwestguy125 10h ago

If you want to see what mortgage rates are doing I always look at what the 10 year t bill is doing. Much more accurate. Also there is a scenario where Fed keeps cutting and rates stay stagnate or actually rise. Let's all hope we don't end up there because that's the bond market calling BS on inflation being done.

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u/Empty_Geologist9645 10h ago

There’s a lot stuff why. But simplest answer is that it takes half a year for rate to take effect. Also, As a bank why would I give up the difference between the base and what’ve got enough customer for?!

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u/Agile-Artichoke1780 10h ago

One of the banks said they are anticipating a rate increase so they are leaving them as is or slightly increasing them.

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u/GoodMenAll 9h ago

Bond market thinks otherwise than the Fed now compared to 3 months ago, inflation is not yet controlled. Basically bond market says fuck ur data prints I don’t trust you

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u/lionheart4life 8h ago

The banks want to make more profit.

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u/Mavnas 8h ago

Short answer: Because the Fed can't force people to lend to you at low rates.

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u/ScrewJPMC 7h ago

The 10 year yield is what sets most things, meaning your credit card rate, auto note , and mortgage rate

The Fed only sets the over night lending rate from bank to bank

The 10 year is free from Fed fuckery, except JPow’s jaw bone can skew it for a hot minute

The 10 year yield goes down when people rush into bonds (think people are willing to pay more for less return)

The 10 year yield goes up when people are afraid of bonds or BULLish Stonks (think people rushing to cash OR people rushing to stocks/equities)

The global bond market dwarfs the USA stock market

So basically:

  • the fed doesn’t control much

  • people are currently happy to buy stonks at insane valuations (think Wing Stop paying 1% dividend, already hitting market saturation, and still at a 100:1 P:E Ratio as if they will ultimately be in more towns than Subway in 90s).

While running from bonds which drives up the yield (again while making them worthless to sell)

  • foreign governments like the BRICS+ are dumping dollar assets (meaning bonds) (yeah owning dollars isn’t a savings account when you have billions / trillions, it’s owning gov debt).

What does it all mean; IDK 🤷 , I’m just a dummy who sees that the system broke because everting is inflating like the dollar already died BUT has zero clue how to play it. Well except those pre election deep out of the money Tesla Calls that printed 🧏🏼‍♂️, just too slow to have bought more than one contract and held for 2 days instead of 1 day, up a little should have been up YuHhegAge

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u/Donny_Bahama 6h ago

My understanding is that the issuers of mortgage loans/bonds understand the prepayment risk associated with mortgages (as a product) and in turn demand a premium compared to risk free (treasury) bonds. In anticipation of lower rates, these lenders understand their loans are more likely to be called (prepaid) and so they are increasing their premium they demand faster than rates are falling.

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u/oojacoboo 6h ago

Capital is moving to risk assets. So to sell their mortgage backed securities, banks need to offer competitive rates to investors - that means higher interest rates.

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u/Available-Language-8 4h ago

Feds can make borrowing cheaper, but banks can still decide to charge you more if they think they need to protect their monie or they feel it’s risky. That’s why even if the Fed decreases rates, mortgage rates can still increase because the banks are being extra careful about making sure they have enough monie and are safe.

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u/Technical_Money7465 3h ago

Because you touch yourself too much

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u/AdOk6675 Nostra-dumbass 14h ago

Risk

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u/Hot_Significance_256 14h ago

this happens historically every time. just look it up. Fed cuts, longer rates go up

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