• Last week, the Federal Reserve reduced the slope of future rate forecasts and emphasized overseas instability over U.S. risk of inflation.
  • The Fed today has some concern that the oil and commodity downward shock of the last two years will reverse, and/or the fall in import prices caused by a strong dollar.
  • The Fed’s decision last week was big in part because every measure of core inflation began to turn up at the end of last year.

Last week, I issued a "rate warning," and then the Fed surprised after its meeting -- not by standing pat, which everyone expected, but by reducing the whole slope of future rate forecasts and emphasizing overseas instability over U.S. risk of inflation. I heartily concur with the Fed’s decisions. However, here in the housing business, concerns continue. [graphiq id="8vQXl6cCXvD" title="Federal Funds Rate vs. Inflation" width="600" height="605" url="https://w.graphiq.com/w/8vQXl6cCXvD" link="//www.graphiq.com/wlp/8vQXl6cCXvD" link_text="Federal Funds Rate vs. Inflation | Credio"] First, for rates to go lower, we’ll need more bad stuff to happen overseas -- and we may not get that soon, or bad enough. Meanwhile, if U.S. inflation does change and trend upward, then the Fed w...