Bond market ready to snap down

 

• A massive amount of commercial real estate loans will come due in the next three months.
• Inflation is almost entirely being driven by housing and energy at this point.
• We face war in Ukraine and Israel.
• Sales of big-ticket items like cars cooled rapidly in the last few months.
• Credit conditions tightened from the April banking crisis.
• There’s a real possibility of a government shutdown.

Going back to our feedback loop analogy, the estimated length for a rate hike to hit the economy in full is roughly 18 months.

The first interest rate increases started in March 2022, roughly 20 months ago.