Homebuilder Stocks Decline As Fed Unwinds

This is a syndicated repost courtesy of Confounded Interest. To view original, click here. Reposted with permission.

The bloom is off the rose for homebuilders. Yes, it had been a great run, fueled by The Fed’s zero-interest rate policy (ZIRP) and asset purchases (QE). But despite a roaring economy, SPDR S&P Homebuilders ETF have been falling since January as The Federal Reserve Open Market Committee (FOMC) sticks to their guns and keeps normalizing interest rates.

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Yes, the Fed Dots Plot project indicates that there is still upside momentum to short-term interest rates.

feddotsplots

And the Fed’s System Open Market Accounts (SOMA) show a declining inventory of Treasury Notes and Bonds to let mature.

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So, let’s put on some groovy pants, put on Iron Butterfly, and chill.

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