Given what he’s seeing on the ground in Detroit, Mark Joseph doesn’t see it happening this year, with talk of a “soft landing” still a likely scenario.
On a freezing cold day this week, at a car dealers’ strip of Michigan Avenue in Wayne County, outside Detroit, used car salesman Mark Joseph says business is still ticking along.
The US manufacturing sector contracted at an accelerated pace this month, after the manufacturing purchasing managers’ indexes slipped for the third straight month to a low not reached since May 2020. Applications to refinance a home loan fell 7 per cent this week and are 80 per cent lower than the same week one year ago; this is despite the long-term interest rate coming down in the past few months.
“Given our outlook, I just don’t see us cutting rates this year,” Powell said at his conference this week.6.5 per cent in December. Legendary “Big Short” investor Michael Burry points out that there has been an incredible contraction in money supply because of higher interest rates and the central bank selling off other assets. This usually helps lower inflation because there is less money in the system for consumers.
“But we think inflation is going to fall a bit faster than the Fed, we think that the labor market is going to loosen a lot more aggressively than where it is today. And I think if you’re 4.5 per cent to 5 per cent on the unemployment rate, and that inflation has fallen into the 3 per cent range, you’re likely to begin to at least seeing a modest adjustment lower in monetary policy by the end of the year.
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