US equities fell at the open Tuesday as earnings from Home Depot kicked off a string of key retail reports and as investors awaited a Federal Reserve symposium this week to set expectations for the path of interest rates https://t.co/pRTsExNFa4 ...

Interest Rates and Housing Market - The market generally believes that a dovish Federal Reserve (J Pal) could positively impact the housing market, but the analysis suggests otherwise [1] - Long-term interest rates are expected to remain elevated, similar to the trend observed after the Federal Reserve cut 100 basis points at the end of 2024 [1] - There's a global aversion to taking on long duration, leading to higher long-term interest rates worldwide, with the UK 30-year gilt yield closing at its highest level since 1998 [2] - Homebuyers shouldn't necessarily expect significant rate relief from short-term interest rate cuts, especially when locking in a 30-year mortgage [2][3] Housing Supply and Demand - A significant increase in the supply of existing homes is needed, primarily driven by baby boomers downsizing [4] - Stimulating housing demand through low mortgage rates without a corresponding increase in supply will only lead to higher home prices, negating the benefits of lower rates [8] - Lower mortgage rates and increased supply are both necessary to increase transaction activity in the housing market [8] Homebuilder Earnings - Increased existing home supply and declining home prices, while stimulating demand, could negatively impact homebuilder earnings, creating a "catch 22" situation [5] Mortgage Rates - Many homeowners have mortgages under 5%, even under 4%, making it difficult to move despite downsizing desires due to potential mortgage rate increases [6]

Market Growth & Consumer Spending - US Bank believes market watchers are overly bearish on growth, anticipating a more positive growth picture than economists currently project [1][6] - Consumer sentiment is incrementally improving, suggesting increased spending in the coming months and quarters [3] - Companies are scaling back deferral of decisions, contributing to a generally positive growth outlook [3][4] Inflation & Interest Rates - The US cannot afford to be an outlier on inflation, with economists forecasting inflation above 3% in September 2026, compared to sub 2% in developed and developing markets [5] - The bond market is seeing the long end climb higher globally, signaling potential stickiness of inflation [6][7] - US Bank views a 10-year Treasury yield between 4% and 5% as a healthy range; sub 4% signals a growth scare, while above 5% suggests underestimated inflation [8][9] - The current 10-year Treasury yield of approximately 435 (435 bps or 435/100 %) is considered a decent level for borrowing and potential resumption of economic activity [10] Global Equity Markets - Loosening of labor laws and increased "animal spirits" in Europe are viewed positively [11] - With central bank estimates anticipating rate cuts (excluding Japan), US Bank sees a favorable environment for involvement in global equity markets, particularly large caps [12]

Welcome back to Squawk Box. Joining us now Jeremy Siegel, chief economist at Wisdomtree and professor emeritus of finance at University of Pennsylvania's Wharton School of Business. Good to see you, Jeremy.We have had guys like Kevin Warsh will mention tariff inflation. He'll say tariffs aren't what causes inflation. Never has been, never will be.Inflation is caused by an out of control money supply or too much stimulus stimulus in a supply constrained world, in your view. And what you're saying here, up th ...

Market Trends & Investment Landscape - Single-family home rentals are on the rise due to increasing difficulty in homeownership for average Americans [1] - Smaller investors are stepping in to buy single-family homes, comprising about 25% of purchases in the first half of the year, while large investors account for only about 5% [1] - Investors purchased nearly 1/3 of homes sold in Miami in Q4 2022, and about 1/4 in Atlanta; in California, investors own more than 50% of homes in 5 counties [1] Affordability & Housing Market Imbalance - High interest rates and economic uncertainty constrain the affordability index, making it difficult for the average American to afford housing [1] - In Nevada, the average income of around $50,000 is insufficient to afford a house, with older homes selling for around $350,000 and new homes around $450,000 [1] - Institutional investors' market share in residential real estate in Nevada is up 8 percentage points in 3 years, reaching 27% of the Vegas market [1] Policy & Potential Risks - Legislation to cap investor-owned homes at 100 failed, raising concerns about balancing wealth expansion and potential greed [1][2] - Privatization of Fannie Mae and Freddie Mac could introduce uncertainty and risk to the US mortgage market, valued at $14 trillion, without careful analysis [5][6][7] - Changes in Fannie and Freddie policies in 2023 have made loan-to-value ratios identical for investors and owner-occupiers [4]

Market Trends - US corporate-bond valuations surged to the highest level in more than two decades [1] - Investors are locking in elevated yields amid speculation that the Federal Reserve will resume cutting interest rates next month [1]

Treasury Bond Market Trends - The Treasury bond market had been relatively stagnant, except for a brief period in April [1] - The yield curve is steepening, with a six basis point increase this week [2] - Global rates are trending upwards [2] Technical Analysis of Yields - The 10-year Treasury yield experienced acceleration before plateauing in the low 430s [2] - Selling pressure intensified as yields approached previous highs around 430 [3] - Yields broke down after a weak jobs report, with the two-year yield showing a more aggressive decline than the 10-year yield [4] - The market indicates that the labor market is more influential on long-end interest rate trading than inflation concerns [4] External Factors and Comparative Analysis - Solid retail sales and import prices at 15-month highs were noted [5] - The spread between 10-year Treasury yields and German Bund yields (Tens minus Boons) is the closest it has been since early April [5] - German Bund yields are at their highest levels since the third week in March, approaching 280 basis points (280%) [5]

Monetary Policy Response to Stagflation - The Federal Reserve faces the challenge of responding to stagflationary shocks, such as those potentially caused by tariffs, which have both inflationary and supply-side effects [1] - The Fed aims to mitigate secondary impacts of tariffs, including wage-price spirals and increased production costs for domestic manufacturers due to tariffs on parts, components, supplies, and intermediate goods [1] - Determining which price increases are transitory and which require a policy response is a key task for the Fed [2] Data Dependency and Economic Outlook - Future monetary policy decisions depend on incoming economic data, particularly inflation reports, to gain clarity [3][4] - Strong economic data with inflation trending downwards would support the Fed's decision to lower interest rates to a settling point [3]

And where are stocks heading from here. Well, we welcome Ed Yardi to Power Lunch. He is founder and head of Ardeni Research.Ed, great to have you on. >> Thank you very much. >> All right.Why do you think the market is not reacting a little more negatively to the hot inflation read and a lowered expectation of more Fed rate cuts in the future. Well, I think the uh market hasn't given up on the idea that the economy is actually resilient, that it doesn't necessarily need lower interest rates and that if we ge ...

CNBC is learning that the Trump administration now currently considering 11 individuals uh for the role as Fed chair. Those include three new names. And joining us right now to talk about those three new names and more, Larry Lindseay, by the way, Rick Reer, David Zeros, is former Cleveland Fed President Loretta Mester.She's an adjunct professor at finance at UPUP's Warden School, CNBC contributor. Want to also talk to you of course about uh inflation, the jobs market, BLS data, and so much more. But curiou ...