{"id":25194,"date":"2025-09-09T13:18:39","date_gmt":"2025-09-09T13:18:39","guid":{"rendered":"https:\/\/www.anthonydidonato.net\/wordpress\/?p=25194"},"modified":"2025-09-09T13:18:41","modified_gmt":"2025-09-09T13:18:41","slug":"hey-fed-play-like-gretzky-and-stop-chasing-rates","status":"publish","type":"post","link":"https:\/\/www.anthonydidonato.net\/wordpress\/hey-fed-play-like-gretzky-and-stop-chasing-rates\/","title":{"rendered":"Hey Fed, Play Like Gretzky\u2014and Stop Chasing Rates"},"content":{"rendered":"\n

Let\u2019s start with a happy twist: Mortgage rates dipped from around 7% to 6.5% in just two days<\/strong>\u2014all thanks to the collapse of Silicon Valley Bank, which pushed investors toward the safest bet out there: U.S. government bonds. That drop can save you about $100 a month<\/strong> on a typical mortgage. Talk about a quick relief! <\/p>\n\n\n\n

Inflation Is Slowing\u2014but Still Chill<\/h3>\n\n\n\n

Inflation is cooling off, albeit slowly. It was at a scorching 9% in mid-2022<\/strong>, down to 6% by February 2023<\/strong>. But here\u2019s the kicker\u2014the Fed wants it to hit 2%<\/strong> before it feels comfortable pulling back on rates. That goal feels like it\u2019s still a couple of years away<\/strong>, though a more realistic target of 3% to 4% by year-end<\/strong> seems doable. <\/p>\n\n\n\n

Why Housing Costs Matter More Than Eggs<\/h3>\n\n\n\n

You might\u2019ve noticed prices on everything\u2014including eggs\u2014feel high. But here\u2019s the scoop: Eggs actually matter very little in the inflation mix (they account for just 0.2%<\/strong> of the average household budget). Meanwhile, shelter costs make up a whopping 34.4%<\/strong>. Rental inflation is still pushing 8.8%, but there\u2019s light at the end of the tunnel: Apartment construction is booming at a 40-year high<\/strong>, which should lead to more vacancy and softening rents. <\/p>\n\n\n\n

Go Where the Puck Is Headed<\/h3>\n\n\n\n

Channel your inner Wayne Gretzky for a sec\u2014he famously said you\u2019ve got to go where the puck is going<\/strong>, not where it is right now. The Fed should adopt that mindset: instead of reacting to current numbers, it should anticipate down the road and pause rate hikes<\/strong>.<\/p>\n\n\n\n

A Small\u2014but Real\u2014Risk: U.S. Bonds<\/h3>\n\n\n\n

Here\u2019s where it gets a bit tense. With the national debt spiraling near $30 trillion<\/strong>, even the \u201csafe\u201d U.S. bonds carry a risk. A default? Unlikely. But if Washington doesn’t get its act together, borrowing costs could rise\u2014including for the government itself. <\/p>\n\n\n\n

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Bottom Line <\/h3>\n\n\n\n