Econ70
New home sales rose in mid-2020 from a pace of 700,000/year to 975,000/year but fully returned to their 700,000/year pre-Covid pace by 5/21. Similarly, existing sales ramped up to a Covid-19 induced level of 6.75 million/year in mid-2020, from 5.4…
Inflation, measured by the Christmas Price Index and based on purchasing one of each day’s items in “The Twelve Days of Christmas,” rose 5.7% to $41,206 from $38,994 in 2019, lower than the CPI rise of 6.2%. Fowl lead the…
While the Fed has commenced tapering its purchases of MBS and Treasuries by $15 billion/Month, this will only very indirectly reduce inflation. It’s because inflation is being generated primarily by supply constraints, not easy money. The best solution would be…
The recently passed $1.2 trillion infrastructure bill, including $550 billion in new spending beyond the current baseline should boost long-run GDP by, at most, 0.1%, or $22 billion/year. As infrastructure spending ramps up, GDP will rise by an extra $33…
From 1949-1966, 20% of Americans moved/year. The percentage steadily declined; by the early 1980s 16% of us moved/year. In the mid-1980s the ratio recovered but has since fallen to 8.4%! Worse, through the 1960s persons steadily moved from poorer areas…
November single-family housing starts fell to an annualized rate of 1.173 million, from 1.182 million Y-o-Y. Meanwhile, multifamily starts jumped from 369,000 in 11/20 to 506,000 in 11/21. Flat single-family starts amidst booming demand and the fact that the number…
The Friday File: Since invented in Britain in 1804 and averaging less than 10 mph, trains have only gotten substantially faster. Japan’s “Bullet Train” in 1964 was the world’s first high-speed rail system and achieved a top speed of 125…
The three most pressing geopolitical problems are Russia’s potential invasion of Ukraine, China’s potential invasion of Taiwan, and Iran’s dash to a nuclear device. Markets will largely ignore Russia/Ukraine as neither are global players and Europe won’t stop Russian energy…
Earlier today the Fed reduced the rate of its purchases of Treasuries and MBS by $20 billion/month and $10 billion/month respectively. Thus, in 3/22 tapering will conclude, paving the way for as many as three quarter-point rate hikes in CY2022,…
While inflation is currently quite elevated, it is important to note that monetary policy works with lags of 12-18 months before the impact of rate changes are fully felt. Thus, the Fed would have had to (among other things) anticipate…