Fed’s Kashkari: There may be a housing downturn but not necessarily a crash | Forexlive

US 30-year fixed mortage rates are up to 7.11%. That’s put a halt to all real estate activity. That will give the supply chain a chance to catch up on materials but there simply aren’t enough houses in the US and a slowdown (or crash) now is planting seeds for material undersupply.

More:

• By moving up rates at an aggressive but not overwhelming pace, allows room for assessment of economy
• Tremendous uncertainty about fundamentals of US economy
• It’s a judgement call on whether we move in 50 or 75 bps increments on rates
• We’re not seeing much evidence that underlying inflation is softening
• We will raise rates to perhaps 4.5% then stay there for ‘a while’ to assess

Given the lags in monetary policy, I don’t know how much time there is to assess anything. Tomorrow’s inflation report will be pivotal for the next meeting.