Fed Chairman Jerome Powell gave a hawkish speech today about how the Fed was going to do whatever it takes to get inflation back to 2%.
How will this change in Fed monetary policy impact housing prices?
If the Fed keeps its word in its commitment to bring inflation down to 2% (it’s 8.5% now), the actions the Fed needs to take will almost surely result in the following outcome:
- the economy is going to get pounded;
- the jobless rate is going to rise – most notably in construction;
- mortgage rates are going to spike higher – and probably way higher;
- housing prices are going to get creamed – especially in CA.
No good thing lasts forever folks – and as I frequently point out in my Timing Letters, the hangover is usually proportional to the binge.
The Battle for Investment Survival
That may not be what you want to hear, but this is the world we all live in.
So here’s what to do: rather than focusing on the things you cannot change, focus on the things you can.
“It is not the strongest species that survives, nor the most intelligent,” said Charles Darwin. “It is the one that best adapts to change.”
You might want to read that statement again. As an investor, those are the most important words you will ever read.
::::::
“How I Stopped Worrying
and Learned to Love Inflation”