Mortgage Rates Up, Mortgage Demand Down

The US Treasury has $252 billion in cash on hand to fund government operations. Google, Microsoft, and Apple combined had more cash on hand at the end of last year.

Market

Prices as of 4 pm EST, 4/19/23

Macro

House Speaker Kevin McCarthy proposed a bill to raise the debt ceiling by $1.5 trillion for a year.

• The plan calls for a $130 billion reduction in federal spending, including cuts to Covid funds, tougher work requirements for anti-poverty benefits, easier regulations for energy projects, and an end to some tax breaks for clean-energy projects (like EVs).

• McCarthy says the bill would save taxpayers $4.5 billion over 10 years.

• Democrats immediately rejected the plan.

The Fed’s latest anecdotal Beige Book report showed little change in overall economic activity in recent weeks.

• It revealed slight easing in the labor market as wages moderate from admittedly elevated levels.

• Overall price rose during the period but the pace of increases has slowed.

• The report also showed tightening lending standards and declining lending volumes and loan demand.

US mortgage rates increased by the most in 2 months last week, rising to 6.43%.

• Demand for mortgage applications fell 10% from the previous week, the biggest drop since February.

• Meanwhile, a new Redfin report reveals median US home sale prices experienced their biggest YoY drop since 2012, falling 3.3% in March from a year earlier.

Redfin

Stocks

Florida Governor Ron DeSantis’ vendetta with Disney rages on.

• A DeSantis-appointed oversight board plans to cancel agreements made under previous leadership allowing the company to control land near its theme parks.

• If canceled, the +60-year agreement would hinder Disney’s ability to expand its resort.

• A legal fight is likely as experts argue voiding the contract could violate state contract and zoning laws.