One of the ways that we track investor expectations for economic growth is by looking at the high yield or below investment grade market.  Issuers in that part of the credit market have fewer funding options than investment grade issuers and are sensitive to changes in investors willingness to provide new capital at affordable rates. ...Read More

Commodity price trends are diverging across different classification types.  This is a shift from the trend in the second half of 2020 into the end of 2021, and the initial reaction to the news of the Russian invasion at the end of February, when all commodities were increasing.  This shift in the trend could have...Read More

The U.S. Dollar Index (DXY) got to the highest closing level since December 2002.  The U.S. Dollar has been increasing against all of the major currencies within the DXY index as well as some of the largest emerging market currencies.  Historically, a large increase in the U.S. Dollar exchange rate signals a tightening in lending...Read More

Mortgage rates have been rising throughout 2022, and the pace has accelerated since March, ending the week of April 21st above 5% for the first time since 2011. Source: FRED. This increase in borrowing costs is starting to have an impact on current and future expected single-family activity.  Some of the impact is driven by...Read More

Throughout the course of 2022, we have been reiterating our view that economic growth and inflation would likely slow on a rate of change basis compared to 2021.  One of the reasons we mentioned is that the comparison set would be more challenging in 2022, especially starting in March.  The release of the March retail...Read More

Our outlook for 2022 has been that the rate of change for economic growth and inflation would slow compared to 2021.  In prior historical periods when this has occurred, long-term interest rates have declined.  This has been especially true when the Federal Reserve has been increasing short-term interest rates.  Thus far in 2022, long-term interest...Read More

Consumer spending, especially durable goods, spiked from the second quarter of 2020 to the second quarter of 2021.  This was aided by a combination of increased incomes via fiscal policy and a lack of an ability to engage in services activities because of COVID.  While incomes have started to come down (especially on a real...Read More

Treasury rates have been increasing in 2022 and continued at an accelerated pace in the month of March.  This has carried over into other borrowing markets, including residential mortgage rates.  The increase in mortgage rates has already impacted housing related data through the month of February and will likely have a large impact on March...Read More

The Federal Open Market Committee (FOMC) voted to start increasing the target range on the Federal Funds Rate last week, moving the range from 0-0.25% to 0.25-0.50%.  They also guided toward the possibility of six more increases by the end of 2022.  These changes in policy stance have led to increased conversations about the future...Read More

In several of the blog posts this year, we have been discussing our view that the rate of change for inflation will likely decline in 2022 compared to 2021 despite the increase in energy and other related commodities (here, here, here).  Our view was based on the combination of more difficult comparisons for consumer prices...Read More