High for longer
November 30, 2022
–Today’s news includes ADP expected 200k. GDP 2.8% from 2.6%. JOLTS and Beige Book. MAIN EVENT: Powell speaks 1:30 EST. Jackson Hole was just three months ago. Since then there has been 150 bps of hiking with another 50 priced for December. Core message likely to be that rates will stay relatively high until the Fed is certain inflation is receding.
–Conforming mortgage loan limits are increasing in 2023 to $726,200, up from $647,200. Some high-priced areas will have a conforming limit of over $1m. Here’s a map (and a mission statement with almost all of the popular buzzwords) :
https://www.fhfa.gov/DataTools/Tools/Pages/Conforming-Loan-Limit-Map.aspx
| Conforming Loan Limit Map | Federal Housing Finance AgencyFairness We value varied perspectives and thoughts and treat others with impartiality. Accountability We are responsible for carrying out our work with transparency and professional excellence. Integrity We are committed to the highest ethical and professional standards to inspire trust and confidence in our work. Respect We treat others with dignity, share information and resources, and …www.fhfa.gov |
With 20% down, that’s a mortgage of $580960, a monthly payment of $3672 at 6.5%. From the FHFA website, “According to the nominal, seasonally adjusted data…house prices increased 12.1% on average, between the 3rd quarters of 2021 and 2022.” It’s hard for Powell to break the government’s own inflation bias.
–AAPL shellacked yesterday, -2.1% while SPX was -0.16% and Nasdaq Comp -0.6%. This is where it gets tricky, the cutting-edge corporate facade, which I’m sure embraces the same cookie-cutter mission statement as FHFA: Fairness, Accountability and Integrity, meets the reality of Chinese factories and policies.
–Curve slightly steepened. Twos nearly unch while 10s +4.8 to 3.746% and thirties +5.6 to 3.80%. 2/10 ended -72.5. Low in this cycle over the past week has been -81/-80.
