URGENT: The FED Cancels Rate Cut, Market Plummets, Major Changes Ahead | Onlyinvesting.info

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Inflation –
When you calculate the cost of ALL items, inflation increased from 3.1%-3.4% – driven higher by one single category: Housing. Since this is typically driven by one-year lease rates, you’ll see that inflation has actually been BELOW 2% for almost an entire year when “Shelter” is excluded.

Soft Landing –
The more time goes on, the closer we’re getting to the illusive “soft landing,” where inflation gracefully comes down without a recession or rising unemployment. However, according to a report, “A soft landing means the top 1% gets record stock prices while you get stuck with the most unaffordable housing market ever, along with permanent price increases & record credit card debt.”

The 2024 Stock Market – Check Out AWealthOfCommonSense Blog:

In all but one case in 2007, all-time highs led to even more all-time highs one year later – and, besides the 1960s and 1970s era of stagflation – 3, 5, and 10 year total returns were also positive. As Ben points out, “The average one, three, five and ten year total returns following new highs were +16%, +27%, +59% and +206%, respectively.”

It’s also worth noting that some data disagrees with this, pointing out that – since 1990, every time the Federal Reserve lowers rates, the market drops. That’s because The Federal Reserve hasn’t dropped rates unless they absolutely need to – so market drops have often coincided with rate cuts.

The 2024 Housing Market –
According to a recent report from Zillow, buyers are finally seeing some relief with lower mortgage rates and Sellers’s rate locks are appearing to wear off, with signs that they’re coming back to the market. Case in point: “A recent Zillow survey of homeowners found that 21% are considering selling their home within the next three years, up from 15% a year ago.”

On top of that, it’s also reported that values are actually beginning to fall. For instance, “home values only climbed month-over-month in just three of the 50 largest metro areas in December.”
Although, the downside is that – for potential homebuyers, “listings are still going under contract in about a month – which is 50% faster than pre-pandemic norms.”

As far as prices are concerned…they say that “the demand for housing will remain high, based on a large share of Millennial first-time homebuyers looking to buy homes, which will push home prices up. We forecast home prices to increase 2.8% in 2024 and 2.0% in 2025 nationally.”

It’s also anticipated that 2024 is going to be a “pivot year,” where we’re going to see homebuilders meet that pent-up demand for single-family and multifamily housing,” adding some much-needed supply back onto the market.

The January 2024 Federal Reserve Rate Cut –
The FED decided to pause rates for the foreseeable future – although, in terms of when the highly anticipated “rate cut” is going to happen, they’re leaving it “To Be Determined.” Jerome Powell recently “reflected a growing sense that inflation is under control and growing concern about the risks that “overly restrictive” monetary policy may pose to the economy.”

Reuters also pointed out that they no longer included the “phrase ‘unacceptably high’ to describe inflation, while laying out reasons why they felt inflation would continue to fall.” All but “TWO Fed officials see the benchmark policy rate lower by the end of 2024 than it is now, with a majority of policymakers seeing it trimmed by at least three-quarters of a percentage point.”

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