FirstFT: US mortgage rates top 6%

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Good morning.

Average US mortgage rates topped 6 percent yesterday for the first time since the 2008 financial crisisdriving up the costs of buying a home as the Federal Reserve prepares to extend its aggressive policy of raising interest rates.

The average 30-year fixed-rate mortgage rose to 6.02 percent, up from 5.89 percent a week ago and 2.86 percent in the same week last year, according to the Freddie Mac weekly survey. .

Rapid increases in mortgage rates have followed the Fed’s campaign to raise its own benchmark interest rate in a bid to quell rising US inflation.

The central bank will meet next week and announce its latest decision on interest rates. The consensus expectation in futures markets is that the Fed will raise its benchmark interest rate by another 0.75 percentage point, the third consecutive hike. But a growing number of investors are betting on a full points hike.

Historically high home prices and rate volatility have begun to scare off potential buyers after more than a year of frantic buying during the pandemic.

Existing home sales in July fell 5.9 percent from the prior month and 20 percent from a year earlier, according to the National Association of Realtors. The NAR said the median US property price was $403,800, up 10.8% from a year ago but $10,000 lower than the all-time high recorded in June.

In the week ending September 9, new mortgage applications fell 1.2 percent compared to the previous week. New home applications were essentially flat compared to the previous week and down 29 percent from a year ago, according to the NAR.

Do you have any comments about today’s newsletter? let me know in [email protected]. Thanks for reading FirstFT Americas and have a great weekend — Gordon

1. FedEx shares plunge 15% after earnings warning FedEx, a company considered an indicator of the health of the global economy, said after the market closed on Thursday that it would close offices, freeze hiring and park planes in response to a decrease in parcel shipping volumes. The company, which is now run by Raj Subramaniam after founder Fred Smith resigned in June, also scrapped its financial guidance for next year in an unscheduled earnings warning that sent its shares down 15 percent.

2. Joe Biden secures a deal to avert the US rail strike. The President of the United States announced yesterday that a tentative deal it had been arrived to avert a rail strike that threatened to disrupt supply chains and inflict serious damage on the economy as soon as Friday. The agreement came after months of negotiations involving the largest railroad companies and unions in the United States.

3. Russia acknowledges Chinese “concerns” over Ukraine invasion President Vladimir Putin told his Chinese counterpart Xi Jinping that Moscow values ​​Beijing’s “balanced position” on the war, according to a Kremlin transcript of their meeting in Uzbekistan yesterday, at the first public admission of differences between Russia and China over the conflict.

  • Related news: The German government has taken over of three refineries owned by the Russian oil company Rosneft, in a major escalation of the energy war between Moscow and the West.

4. The British pound sinks to the lowest level since 1985 British pound falls to its lowest level since 1985 against the dollar after a round of weaker-than-expected data on UK retail sales, concerns mounted that the country was headed for a prolonged recession. The pound fell 0.8 percent in London morning trading to $1.137, the first time it had broken above the $1.14 mark in nearly four decades.

5. China’s LGFVs go on a land purchase The financing vehicles of the country’s local governments are rush to buy large amounts of land with borrowed funds, rescuing cash-strapped cities and provinces and propping up a collapsing real estate sector following an exodus of indebted private developers.

How well did you keep up with the news this week? take our Test.

the days ahead

Erdogan meets Putin The second day of the Shanghai Cooperation Organization summit in Samarkand, Uzbekistan, will be attended by Turkish President Recep Tayyip Erdoğan, who will meet his Russian counterpart Vladimir Putin on the sidelines of the conference. Prime Minister Narendra Modi of India and President Alexander Lukashenko of Belarus will also attend.

The queen’s children hold a vigil King Charles III, Princess Anne, and Princes Andrew and Edward hold a vigil at 7:30 tonight to mourn the death of his mother, Queen Elizabeth II. The late monarch will be laid to rest in a private ceremony after her state funeral at Westminster Abbey on Monday.

Scandal! premiere the netflix documentary The incredible story of how the Financial Times’ Dan McCrum brought down Germany’s massive fraudulent payment processor, Wirecard, is being released worldwide today.

Dan McCrum, right, spent seven years investigating fraudulent payment processor Wirecard, a story that continues as executives await trial © Courtesy of Netflix

Join board members and senior executives in person or online for the Cyber ​​Resilience Summit September 21-23 to hear remarks from speakers, including Bill Clinton. Sign up for your pass today.

what else are we reading

Where We Keep Going Wrong About Inflation When things get more expensive, that’s inflation, and that’s bad, apparently. But an alternative view is that of Milton Friedman: “Inflation is always and everywhere a monetary phenomenon.” And this distinction matters, Tim Harford argues.

Xi’s plan for economic independence Under Xi Jinping, who seems almost certain to secure another term in power next month, China is trying to become a state-run and self-sufficient techno-superpower that it will no longer depend so much on the West. But how realistic is this goal in a connected world?

King Charles and the future of the monarchy Can Britain’s new line of kings keep the union and the commonwealth togetherasks Mateo Engel. With doubts over Scottish independence and Northern Ireland trade deals, the UK faces an existential threat not seen since 1940.

The battle between Lula and Jair Bolsonaro Three years ago, Luiz Inácio Lula da Silva languished in jail accused of corruption and money laundering. But if a divisive election that has pitted Brazil’s former president against his incumbent goes its way, will soon return to power.

How to reboot men for gender equality At the top and bottom of society, new definitions of masculinity can help everyone prosper, writes Simon Kuper. three recent books trace the contours of a redefined masculinism.

Sport

Roger Federer, one of the most popular and successful tennis players in the history of the sport, has announced his retirement. He amassed a whopping 20 Grand Slam titles in nearly two decades at the top of the game that made him one of the top earners in the sport.

  • From the files: In 2019 Federer sat down with Simon Kuper to talk about his job, being a father and what he has in common with Lionel Messi.

Roger Federer

Roger Federer posted a message on social media on Thursday explaining his ‘bittersweet’ decision © Neil Hall/EPA-EFE/Shutterstock

interrupted times — Document changes in business and the economy between Covid and the conflict. Register here

Asset Managementsign up here for the inside story of the movers and shakers behind a multi-billion dollar industry

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