Morning Report: Big increase in wholesale prices

Vital Statistics:

 LastChange
S&P futures4,50118.2
Oil (WTI)69.791.65
10 year government bond yield 1.32%
30 year fixed rate mortgage 3.07%

Stocks are higher this morning on overseas strength. Bonds and MBS are up small.

Inflation at the wholesale level rose 0.7% MOM and 8.3% YOY, according to the Producer Price Index. Ex-food and energy it rose 0.6% MOM and 7.3% YOY. Foods (especially meat products) were a big contributor to the increase, as was transportation and warehousing. Building products (and lumber) pulled down the numbers. It is important to keep in mind that the annual numbers are being affected by COVID lockdowns of a year ago, so there is going to be some exaggeration in the numbers.

The 8.3% increase in prices is the highest reading going back to 2010.

The Biden Administration is going to demand that all Federal workers and contractors get vaccinated, and is going to insist that all companies with 100 or more employees require vaccination. The net result of this will probably be to exacerbate the labor shortage even more.

United Wholesale is launching an appraisal management company-free program, which will handle appraisals in-house. Not sure how their current hundred or so AMC will like this.

HUD is looking at strategies to reduce regulatory barriers to affordable housing. My guess is that their strategy will be nothing new – it will be to sue local governments to eliminate single-family zoning. “The research makes clear that there is bipartisan support for state and local reform to improve housing affordability,” said HUD Secretary Marcia Fudge. HUD and the Administration will remain hard at work to build inclusive, equitable communities through affordable housing.”

Author: Brent Nyitray

In the physical sciences, knowledge is cumulative. In the financial markets, it is cyclical

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