The Great Fed Unwind
The Federal Reserve has propped up markets over the last decade and especially over the last 3 years. It bought $5 trillion of loans in the last two years, more than he prior 23 years combined.. Now the great Fed Unwind is upon us. It’s buying has been a pillar supporting recent jumps in inflation to multi-decade highs. It doesn’t achieve the notably feat alone though. Massive government over-spending occupies the second pillar supporting inflation.
The uncertainty of the great Fed Unwind and the market reaction drove interest rates up substantially in September-October. But the market hates uncertainty more than many other factors. So immediately following the announcement to slow buying, interest have fallen by a little under a quarter point in a few days. The Fed over-reaction to acquire more than $4 trillion of asset follows the historic pattern of Fed over-reactions. For some reason, the Fed fears stability and doing little to nothing. So it does something. Most frequently it is wrong in what it does, but forgets to stop digging the hole it creates.
As predicted near the beginning of the year, not jumping on the FOMO bandwagon, keeping powder dry and getting your financial house in order should have been top priorities in 2021 for those wanting to buy a house and get a mortgage.
Preparation
You started by picking up a copy of Winning Mortgage, Winning Home. Following that, you determined to expand your knowledge and preparation. Zillow will be unloading 7,000 homes it purchased recently and taking a billion dollar loss from over-paying. Be ready.