An overheated housing market important reason why the Fed is raising rates
The Fed needs to remove the heat from demand without prompting an accident among mortgage financiers.
The key question now is whether the sector can be brought into some kind of even keel without causing an accident along the way. And which parts of the financial system might be the most vulnerable.
Just as money market mutual funds developed to allow investors to avoid paying for deposit insurance, as they would have to do on funds held in banks, so non-bank financial institutions have been able to seize yet more business that would once have been done by traditional lenders.
Most non-Americans will only have heard of two; and very few Americans will have heard of all of them
John Authers 29 June 2022
Englunds lag 3 (Inflation and the housing market)
Räntan (A) är vad som behövs för att stoppa inflationen.
Räntan (B) är den som gör att bostadsmarknaden kollapsar.
Om A är större än B har vi ett stort problem.
Englund: Englunds lag 3 (Inflation and the housing market) (englundmacro.blogspot.com)
Leverage and Deleveraging
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