The Federal Reserve’s rebuttal to the 8.58% inflation rate, year over year for May was to raise their rate by .75% yesterday. Interestingly, we have seen about a .75% mortgage rate increase across the board since June 10th. So in theory, today’s rates should hold this week, assuming the .75% is already priced into the rates.
It was the largest rate hike in 28 years. The current estimate is that inflation will only drop to 5.2% by end of 2022. Projected a .50% to .75% hike next meeting (in 2 months). Stated that the Fed was not trying to induce a recession. Housing prices may continue to increase regardless of mortgage rate increases. However home sales have been decreasing slightly over the last few months.
Interestingly, Treasuries dropped during Powell’s speech, and the indexes all rose. The Dow passed +600 at one point. Stocks were mainly in positive territory apart from crypto. End of the trading day indexes were down but still in positive territory, Treasuries up but lower than the day’s open. Let’s see what happens today now that the world has digested our .75% hike.
