Consumer Economy
Existing Home Sales (EXHOSLUSM495S) 4.01M +80.0K (+2.00% m/m)
The number of homes sold continues to chop sideways around 8-year lows. The recent peak was back in 2021.
Credit & Rates
Fed Balance Sheet (WALCL) 6.62T -25.2B (-0.38% w/w)
Total Bank Credit (TOTBKCR) 18.67T +39.0B (+0.21% w/w)
30 Year Mortgage Rate (MORTGAGE30US) 6.58% unchanged.
10-Year Treasury (DGS10) 4.27% -6.0 bp
20+ Year Treasury Fund (TLT) 87.05 +0.65 (+0.75% w/w)
Bank credit expanded this week, 10.92% annualized. Treasury rates moved lower, especially at the short end of the curve. That’s effectively 1/3rd of a rate cut.
Jackson Hole Friday
Powell gave a speech at the Fed’s yearly party in Jackson Hole – as Fed Chairs have done for decades – and in the speech, he, well, you can listen here:
Federal Reserve Chair Jerome Powell speaks on economic outlook in Jackson Hole speech — 8/22/25 [21m]
(source – youtube/CNBC)
Wolf does a long analysis.
Powell Makes Room for Rate Cut. Fed Kills “Average Inflation” Targeting that Caused so Much Damage when Inflation Raged [Aug 22]
(source – wolfstreet)
My interpretation of the Fed’s view:
Powell sees the labor market is weakening, although “slack work” isn’t appearing – maybe due to deportations, and the unemployment rate isn’t moving higher. At the same time, inflation remains high [even grossly understated by at least 6%]. Tension between high inflation and a declining workforce is the problem. The Fed may cut, but slowly.
My view:
The Big Bloated Bill will make inflation worse, as will No Electricity For You (AI data centers).
The elephant in the room is the DeathVax effects, which killed or wounded millions of Americans and resulted in a tighter-than-normal labor market due to fewer workers and fewer people able to work. CNP (total pop) disability: +6 million, NILF sub-group (not-working) disability: +3 million. Deportations (CNP – Foreign born): -2 million. Estimated DeathVax killed: 1.5 million (25% of disabilities). This all sums to “a shrinking workforce.”
Net-net: if we didn’t see the DeathVax wounded eliminated from the labor force [NILF-Disability increase=3M], alongside deportations [CLF-Foreign decline=1.5M], I believe employment would be an utter disaster right now. With 4.5 million workers eliminated from the workforce, that’s why we’re seeing bad (absolute) payroll numbers (PAYEMS), yet no “unemployment rate” increases, and only a small increase in “working part-time / slackwork” conditions.
Here’s UNRATE
by mark_bc 
