In February 2021, housing market potential increased to its highest level since 2007, despite the largest month-over-month jump in mortgage rates since October 2019. Housing market potential rose 1.3 percent in February relative to the previous month, and 12.2 percent year-over-year. While rising average tenure length was the largest drag on ... Read More›

When determining where to set the federal funds rate, the Federal Reserve studies a multitude of models and analyses, including the neutral rate of interest. The neutral “what” you ask? The neutral rate of interest is the short-term interest rate that would prevail when the economy is at full employment and stable inflation. The Fed may choose to ... Read More›

Given both emergency rate cuts of the Federal Reserve and the recent economic uncertainty due to the spread of the Coronavirus, the 10-year Treasury yield dropped to its lowest level in 150 years, according to Nobel Laureate Robert Shiller. For added perspective, that takes us back to the time of Ulysses S. Grant’s presidency. The 10-year Treasury ... Read More›

Global events and uncertainty, such as the conflict between the U.S. and Iran, clearly impacts geopolitical relations, but also impacts the U.S. economy, and more specifically, the U.S. housing market. How? Against a backdrop of uncertainty, investors worldwide look for a safe place to put their money. U.S. bonds, backed by the full faith and ... Read More›

Important, but easy to overlook shifts in investment trends may be contributing to our current era of low interest rates. An excess supply of global savings relative to the demand for that money for investments is driving down interest rates, which can be thought of as the price of money. The neutral rate of interest, which is monitored by the ... Read More›

Many people understand the “natural rate of unemployment,” and if you don’t, you can probably guess what it is – the rate of unemployment when the labor market reaches equilibrium. What many people don’t know is that a similar concept exists in monetary policy. Read More›