![]() But is that a pipe dream?Īndrew Patterson, senior international economist at Vanguard, told me he thinks rate cuts are unlikely until 2024. So investors might be playing the long game and betting on Fed easing within the next year. The Dow was up more than 600 points, or 2.1%, in late morning trading. Barclays predicts that the central bank will lower rates by a quarter of a point at each of its last three meetings in 2023. Possible catalysts? Even though the hotter-than-hoped-for inflation report is sparking fears of more big rate hikes from the Federal Reserve, some optimists are starting to see light at the end of the Fed tightening tunnel.Įconomists at Barclays said in a report Thursday that they now expect another three-quarters of a percentage point rate increase in November and December and then a half-point hike at the Fed's February 2023 meeting.īeyond that? A pause. The Dow, S&P 500 and Nasdaq were all soaring in late morning trading. Stop this market! I want to get off! Stocks roared back in late morning trading after plunging at the opening bell. With Redfin coming out and saying there is a decline in rents, maybe the Fed has something to glob on to that will allow it to slow the rate hikes," said Lamar Villere, portfolio manager with Villere & Co. Investors may be hoping that's the case, which is one reason to justify the big stock market surge Thursday. If that's true, inflation pressures could finally start to subside more dramatically. “We expect rent growth to slow further into 2023 as Americans continue to hunker down and more new rentals hit the market,” Marr added. “The rental market is coming back down to earth because high rents and economic uncertainty have put an end to the pandemic moving frenzy of 20, when remote work fueled an enormous surge in housing demand,” said Redfin deputy chief economist Taylor Marr. The increase in owner's equivalent rent was the biggest since June 1990.īut a report from real estate brokerage firm Redfin ( RDFN), also released Thursday, showed that the median monthly rent nationwide fell 2.5% in September. ![]() The government said in the CPI report that both rent and owners' equivalent rent (which measures how much a homeowner estimates they could get if they rented their property) rose 0.8% from August. But there is some confusion about whether rent increases are finally peaking or not. So with rents rising dramatically over the past year (along with housing prices), it's no wonder that CPI numbers continue to come in higher than expected. ![]() Shelter costs make up a big chunk of the consumer price index. Residential apartment buildings are seen in New York City in July. ![]()
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