Broken Transmission: Real Effective Fed Funds Rate Still Negative, Real 30 Year Mortgage Rate At 1.87%, Real Avg Hourly Earnings YoY Is Negative (As Real Home Prices Growing At 4% YoY)

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If we look at the Consumer Price Index for all Urban Consumers (All items) on a year-over-year (YoY) basis, we can see that “inflation” has been rising and is above 2.5% YoY.


Now, if we look at the effective Federal Funds rate (the rate at which banks lend to each other) on a REAL basis, we can see that it is negative. And has been negative since The Fed’s QE program started (except for a brief period in 2015).


30-year mortgage rates are under 2.5% in real terms at 1.87%.


And REAL average hourly earnings growth in NEGATIVE.


REAL housing prices are growing at around 4% YoY.


Let me get this straight. REAL house prices are growing at 4% while REAL hourly earnings YoY are declining?

We better call AAMCO since The Fed and Federal government policies aren’t working properly.




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