What we’re reading (8/25)
“U.S. Treasuries Not The Safe Bet They Once Were, Research Says” (Reuters). “Long touted as hands-down the world's "safe haven" securities, the behavior of U.S. Treasuries during and after the COVID-19 pandemic calls that label into question, suggesting they are little different from the debt issued by the likes of Germany, Britain, France, or even big corporations. That's the key finding of new research presented at the Kansas City Fed's annual research conference in Jackson Hole, Wyoming. It examines a shift in investor behavior in that period that raises questions about the ‘exorbitant privilege’ the U.S. government has long enjoyed to borrow broadly on the global market even as federal budget gaps grow ever wider.”
“Mortgage Relief Is Coming” (Calafia Beach Pundit). “[T]he market expects the funds rate to fall 200 bps over the next 12 months. Thanks to these anticipated cuts, the 10-yr Treasury yield has fallen to 3.8%, down significantly from a high of 5.0% last October. 30-yr fixed mortgage rates—which are driven primarily by the 10-yr Treasury yield—have fallen from a high of 7.8% last October to just under 6.5% today.”
“Don’t Get Your Hopes Up About The Housing Market” (Business Insider). “[T]he impact of lower rates on affordability is complicated. On the one hand, lower borrowing costs would likely make mortgages cheaper for buyers and encourage builders to construct desperately needed new homes. But in the short term, a rate cut could trigger a rush of buyers to enter the market, overwhelming any new supply and driving up competition and prices. A rate cut ‘would probably result in more competition because demand would grow more than supply would,’ Daryl Fairweather, chief economist at Redfin, told Business Insider.”
“Why Is Rent So High? The Justice Dept. Blames A Tech Firm’s Algorithm.” (Washington Post). “The Justice Department and attorneys general from eight states are suing a Texas-based software company accused of using complex algorithms to enable widespread collusion in rents by landlords.”
“The Summer Is So Hot, Workers Are Wearing High-Tech Ice Packs” (Wall Street Journal). “New technologies for keeping people cool no matter the conditions are growing in popularity and sophistication. Used by soldiers on patrol, fast-food workers or mascots in costumes, what they have in common is simplicity, affordability and ease of use—all factors that have limited the deployment of this technology to date. These real-life Earth suits have the potential to keep people from suffering heat injury when the weather outside exceeds the temperature and humidity at which the human body can effectively cool itself.”
