US stocks snapped two days of losses after Federal Reserve Bank of Atlanta President Raphael Bostic said the central bank could be in a position to pause rate hikes sometime this summer. While Bostic’s remarks boosted sentiment Thursday, other central-bank officials in recent days have reinforced their hawkish rhetoric. After January’s party and February’s let-down, the focus now is back on how much higher interest rates might go in the US and Europe. Swaps markets are pricing a peak Fed policy rate of 5.5% in September while some traders are betting the benchmark interest rate could rise to 6%. Relentless data showing a historically tight American job market may have job seekers smiling, but Wall Street is gritting its teeth. “What we saw in January and really going back to October was the markets were incorrectly interpreting a pivot,” said David Spika, president and chief investment officer of GuideStone Capital Management. “Now the market is accurately pricing in, alright, the Fed is going to have to keep raising rates.”
In America, you really have to be rich to buy a home. First-time buyers made up the smallest share of sales on record last year, at 26%, and that even as home values started to cool. Rising borrowing costs and still-high prices have pushed housing to the most unaffordable levels going back almost four decades.
