Fed Stimulus vs.
U.S. Home Prices

               Following the extensive measures the U.S. central bank took in 2020 to contain the economic damage that resulted from the coronavirus, the Federal Reserve’s balance sheet grew to over $8 trillion in June 2021 – it’s highest level ever. 

               Even though the Fed’s balance sheet has nearly doubled since March 2020, the Fed said it will continue to buy Treasury and mortgage bonds at a pace of about $120 billion per month to keep interest rates low and support the economy.

 

                                             How has this massive Fed stimulus

                                                 impacted U.S. housing prices?

 

               In March 2020, the Case-Shiller National Home Price Index was rising at a 4.6% year-over-year rate.

               In April 2021, it was rising at a 14.6% annual rate – its highest year-over-year gain ever recorded.

 

                                                              The lesson?

 

              If you want to make money in the markets, Don’t Fight The Fed.

 

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                     For details on my October 23, 2021 seminar, CLICK HERE.