ZYTrade: Low rates supposed to entice borrowing and spending, according to Keynesians (most mainstream economists, in other words). Isn’t that why the Fed sets interest rates? Well, the mortgage industry numbers beg to differ. Mortgage rates are falling, but demand isn’t picking up. Coincidentally, money velocity–the speed by which your dollar exchanges hands in a flurry of purchases–is slowing too. Wait…how’s GDP supposed to ramp up enough to claim a “recovery’?
I never thought I would see this. 30Y fixed-rates for mortgages are crashing with crashing M2 Money velocity.
Powell’s face is the symbol of failure.
Originally posted on Confounded Interest
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