R Houseman 🇺🇸

[James E. Thorne @DrJStrategy]

Only a Keynesian can look at a Fed‑made housing recession and sub‑2 per cent breakevens and demand more hikes.

Breakevens below 2 per cent, yet the Wall St Keynesians still want to tighten.

The Fed’s new leadership has inherited and not yet escaped, a Powell‑era mistake: treating housing as a demand dial to be turned with rate increases, even as high‑for‑long policy locks in existing homeowners, suppresses new supply and deepens the affordability crisis.

Scott Bessent rightly points out that the US housing market is stuck because a large cohort of owners, locked into ultra‑low pandemic‑era mortgage rates, will not sell; higher policy rates are crushing transaction volumes without generating the inventory needed to clear the market.

Rate hikes have cooled demand and driven new borrowing costs sharply higher, but they have not triggered the usual inventory cycle, leaving housing in structural gridlock.

Yet Wall Street’s Keynesian economists, still running the Powell playbook, are calling for more hikes into what is now a faded supply shock. To a Keynesian Growth is Bad.

Kevin Warsh, by contrast, understands that the supply side cannot be treated as an afterthought and that the central bank has already engineered a housing recession it must now own.

[R Houseman 🇺🇸 @Ryan_Husmann]

@StealthQE4 Just like when they thought oil could go to $170-$200 a barrel a few months ago..

[R Houseman 🇺🇸 @Ryan_Husmann]

@catturd2 @RegularGuyRant And here is yet another reason why they don’t teach cursive anymore.

[Nostra, House of Gold @Nostre_damus]

185k of the jobs number are just temporary jobs just for FIFA world cup

thanks for playing

[R Houseman 🇺🇸 @Ryan_Husmann]

@IterIntellectus Shopping

[X22 Report @X22Report]

Powell's term as Fed chair ends May 15th. He just announced he's staying on as a GOVERNOR — to be determined how long.

NO Fed chair has done this in 78 years.

He's taking orders from Team Obama to use monetary policy to keep the economy reigned in so Trump can't have a white hot economy heading into the midterms.

[Peter St Onge, Ph.D. @profstonge]

It's never actually for the children.

[R Houseman 🇺🇸 @Ryan_Husmann]

@RealGameVault I remember this!

[R Houseman 🇺🇸 @Ryan_Husmann]

@InsiderWire Nuclear bomb testing. What else is new

[R Houseman 🇺🇸 @Ryan_Husmann]

@Ravenismeee

[R Houseman 🇺🇸 @Ryan_Husmann]

@HaloClassicHCH My favorite controller!

[R Houseman 🇺🇸 @Ryan_Husmann]

@Hyperkin @Sonic_Iso I would! That’s exactly what I was looking for

[R Houseman 🇺🇸 @Ryan_Husmann]

@GuntherEagleman Put them all in jail for tax fraud.

[Insider Wire @InsiderWire]

#BREAKING: ActBlue 'may have misled Congress on its foreign donations,' lawyers warn.

[Laura Ingraham @IngrahamAngle]

No kidding! Did he also say this during Biden?

[zerohedge @zerohedge]

Chicago Approves 19% Hotel Tax To Fund Tourism Push https://t.co/yiuCqhUm2z

[James E. Thorne @DrJStrategy]

For the record.

As Operation Epic Fury continues ahead of schedule. Doomers freak on hot PPI print.

Wall Street has never met a data point it couldn’t torture into a grand narrative. This week’s hot PPI print and an oil supply wobble are merely the latest props in a familiar morality play: inflation is back, the spiral is here, and only higher-for-longer can save us from ourselves. The same crowd that insisted “wages cause inflation” and “tariffs cause inflation” now chants “supply shock causes entrenched inflation” with the same unearned certainty. It’s not analysis; it’s Pavlovian Keynesianism dressed up in a PowerPoint deck.

The basic error is embarrassingly simple. A relative price shock – oil, shipping, selective bottlenecks – is treated as a permanent, economy‑wide regime change rather than what it almost always is: a one‑time tax on real incomes that eventually snuffs out its own impulse.

Yes, it sounds counterintuitive, but high energy prices are ultimately deflationary, because they choke off real economic growth by squeezing household budgets and raising business costs, which dampens demand across the rest of the economy.

Instead of distinguishing between level effects and ongoing inflation, between transient cost pressure and genuine wage‑price dynamics, Wall Street happily sums everything under the banner of “sticky inflation” and calls it a thesis.

Meanwhile, the same strategists who were visibly late to the first inflation wave now overcompensate by seeing ghosts in every monthly print. They extrapolate the noisiest components, ignore base effects, and airbrush away the supply response that higher prices inevitably trigger. The oil market is treated as a static cartoon, shock goes in, inflation comes out, rather than a dynamic system where new supply, substitution, and policy all work to neutralize the initial hit.

The fact that prior energy spikes have given way to lower inflation as the dust settles is quietly forgotten; it doesn’t fit the slide deck.

Overlay that with the Trump strategy, a coming peace dividend and the Street’s blindness looks even more costly. A deliberate push to rebuild domestic supply, deregulate production, and normalize trade terms is already working its way through the system ahead of schedule, setting up exactly what the inflation doomers say is impossible: a dramatic fall in prices and a genuine peace dividend as energy, logistics, and geopolitical risk premia all deflate.

The architecture is in place for cheaper goods, cheaper energy, and a re‑pricing of risk away from permanent crisis and back toward productive investment.

Against that backdrop, the Powell Fed is not “prudent,” it is materially too tight. Fed funds should already be sitting near a neutral 2.75%, not pinned in a zone designed for yesterday’s inflation scare. And yet Wall Street’s Keynesians house view still pretends that policy is roughly appropriate, while conveniently ignoring one awkward empirical fact: it takes at least 24 months for the full effect of rate cuts to transmit through the real economy.

By the time the same people who misread the first wave of inflation finally concede that policy is restrictive, the lagged impact of today’s stance will already be biting into growth and prices.

Investors should, once again, do the opposite of what the Doomer narrative prescribes: discount the coming disinflation,fading the inflation doom shock. A too‑tight Fed marching behind the curve, a Trump strategy accelerating the restoration of supply and security, and long lags in monetary transmission are not the ingredients of an endless inflation spiral; they are the set‑up for falling prices and a peace‑time repricing of assets. The tragedy is that Wall Street, still hyperventilating over a PPI release, is about to miss the turn, again.

[James E. Thorne @DrJStrategy]

For the record.

Excuses Aren’t Policy: The Fed’s Crisis of Competence.

The Powell Fed’s latest decision shouldn’t surprise anyone, by now, incompetence is the baseline. Shocks don’t need central bankers to “manage” them; they dissipate naturally. That’s first‑year economics. Yet the Fed continues to treat every temporary disturbance as a crisis of their own invention. When the results inevitably disappoint, Powell hides behind the platitude that “it’s a difficult decision.” It isn’t. Monetary policy is difficult only for those who refuse to learn from their own mistakes.

And when cornered, the Fed retreats to the tired excuse that “it’s always in a different position.” It’s not, and that is no justification for the steady degradation of judgment we’ve seen under Powell. Consider inflation expectations: before the Powell circus arrived, the five‑year five‑year forwards were the gold standard. Today, at 2.12%, they remain well below long‑term averages—proof enough that expectations are firmly anchored.

Rate cuts, we’re told, are blunt instruments that “affect the whole economy.” They don’t. Real estate is in recession, and an insightful Fed, if such a creature existed, would already have moved toward 2.75%. But insight has never been this institution’s strong suit. The Fed clings to lagging indicators like inflation and employment while ignoring the leading signals flashing red across credit and housing. They remain unmoved by the inconvenient truth of policy lags that stretch two years or more. So yes, the Fed made another mistake. And no, it shouldn’t surprise anyone.

High energy prices are not inflationary in any sustained sense. They drain real incomes, crush discretionary spending, and deter investment—classic deflationary dynamics. The logical result is weaker growth, not runaway inflation. Yet the Fed remains trapped in a 1970s hallucination, reacting to every cost spike as though OPEC were plotting at midnight. It’s the same textbook error they made with wages and tariffs: mistaking a negative supply shock for a permanent inflation regime. After half a century of economic evidence to the contrary, the persistence of this misunderstanding can only be described as what it is, total incompetence dressed up as vigilance.

[Kip Herriage @KHerriage]

This Fed meeting is all about the war and especially “the sharp increase in oil prices.”

But when oil prices were plummeting from Joe Bidens $115/b oil down to $54/b oil under Trump…crickets.

J Powells Fed is the most political Fed in history.

[Henrik Zeberg @HenrikZeberg]

Let me be very clear!

An oil spike in a weakening economy is not inflationary - it is contractionary!

The FED is extremely misguided if they are going to treat a Supply-Driven Oil-spike as an inflationary trigger.

FED needs to LOWER rates to counter the effects of higher Oil Prices.

"The Income Effect" is the reason.