I hope people weren’t short on any HB’s today, the squeeze is on. It appears the Fed took away any language about further tightening which the market interprets as a stepping stone to a rate cut. Those swing trades can be brutal.
It appears to me the FED is stuck. This has the appearance of Stagflation. They know this “adjustment in the housing sector is ongoing” i.e. bottom is falling out, and they know this is going to impact the economy but you have this stubborn bout of inflation hanging on and a grave risk to the dollar if they cut. These upcoming ARM resets will be pretty brutal this year with not much in they way of help. I know there is quite a bit of pressure on the FED to start cutting right now. IMO the days of reinflating this housing bubble are coming to a close. By the time the FED can ease the housing downturn will be at a point of no return. In all honesty I think we have passed that point anyway.
