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.