Ever feel like you're riding a rollercoaster, courtesy of the Federal Reserve's interest rate fluctuations? Well, strap in and prepare for a comprehensive analysis of what a "higher for longer" economic horizon may entail. We dissect the aftermath of the Fed's March meeting, ponder over its impact on everything from business investment to supply chains, and the ripple effects on the real estate industry—especially in the wake of a shakeup in how buyer's agents are remunerated. I'll also share my personal journey through these times, navigating the choppy waters of economic uncertainty, and how I strive to keep a healthy mental compass despite the odds.
This episode isn't just about economic discourse though; it's a testament to the art of respectful disagreement. I emphasize the significance of conversations steeped in growth and understanding, particularly when opinions diverge. It's a call to embrace civil discourse in an era where it's rapidly becoming a lost art. We all have our views and, in this candid exchange, I remind everyone why it's crucial to listen and engage without diminishing others. Join me in fostering a community of informed listeners ready to face the economic tides with resilience and respect.
I know you guys are sick and tired of me telling you higher for longer, but guess what? We are truly going to stay higher for longer. The Fed will start their March meeting tomorrow, March 20th, and we already have talk about them moving the dot plot, which is where they actually take and move it up and down based upon the Fed's interest rate or their lending rate. Moving it north to go higher. Is that going to happen? I don't know. So today, guys, I want to be able to talk about a little bit about the Fed, what's going on, but, better yet, how can we actually help ourselves during this time and also work on our mindset, because I know I'm struggling a little bit with my mindset with everything going on, and if I potentially be struggling with it, I'm sure there's others and it's just stuff that I'm doing. So Fed meeting starts out this week, tomorrow, March 20th. Some of the suits out there are talking. One of them I saw, and I'm just reading off my screen guys, Fed keeps excuse me, Fed keeping rates high hurts business investment, hurts supply chains and encouraging more fiscal spending. So let's stop there. Fiscal spending. So if the government continues to put out trillions of dollars in the actual economy and we don't have enough consumption straight up for inflation. What do we do? We stop spending. We can't prop the economy up with government spending. It just sets us up for longer and also rates will stay. Excuse me, I'll back that up, back up. We'll stay higher for longer, but we'll be in this quote unquote recession for longer. Also because that 10 year treasury and the two year treasury is still inverted, which means we have pain and until that goes back to zero and goes north to a positive number, we still have issues. The other thing is when we have too much spending and then we have supply chain issues. Sound familiar, COVID.
Speaker 1:
What happened to pricing? It went north. So what will that do? Increase inflation also. Prices will go up. So a good example of this is oil. Oil is at close to $82 a barrel right now. That's an inflationary action. As it continues to go north, it's going to cost you more to drive your fuel, put fuel in your car. We're coming to the peak season of driving spring, summertime and guess what? The more you spend, the more the inflation continues to stay there. Prices still haven't come down and stabilized.
Speaker 1:
We also have a problem with housing. Housing, rent, equivalent mortgages. Prices of houses are still 20 to 30% overpriced compared to where we were before. We had the run up in the pandemic. And then during the week last week, we have NAR the National Association of Realtors coming out saying they're going to settle their class action and no longer having to cooperate with a buyer's agent for compensation. So buyers' agents are on their own to figure out how they're going to get compensated.
Speaker 1:
Is that going to hurt the market? Potentially, but I think there's ways to work around it and I don't have all the answers on that, guys. But I can tell you this If the market bears us going one direction, like where we can't offer 3% commissions to a cooperating agent, you don't think there's going to be other ways to do this. Seller concessions is the first thing that comes to my mind. But again, with seller concessions you have to offset and gross up the listing. So if that property doesn't appraise for that additional dollar amount above and beyond what the price of the house is listed for, that buyer's agent is just going to be stuck with that dollar amount. Is that going to work? I don't know. In the non-QM space, the non-qualifying space, which means investor loans, they're already talking about potentially financing some of that into the actual loan itself, for the buyer Don't know how that's going to work because that is also going to inflate the dollar amount that's out and the property will still have to appraise at a amount that still works for the loan to value. So there's some roadblocks there, but I also think there's other ways that this could be accomplished. I'm talking to some realtors in the industry. I'm also talking to some teams, but also some main, some really strong named brands out there, and I'm trying to get a grasp on what they're trying to do and how they're doing it. Don't have the complete picture, but there are some things in the works and once I get to that point I will share that with you guys Also.
Speaker 1:
We have a lot of craziness going on in the world and this is going to mindset. I saw an article in the Wall Street Journal I don't know if it was last week or the week before, Somewhere in the realm of 78 or 80% of people can't tell the difference between fact and fiction because it's so blurred with thought, and they specifically said hatred towards the other side of the conversation. And this is getting me to the mindset, guys, If we can't discern between fact and fiction, we're in trouble. Are we putting ourselves in a bad position as a nation? I'm not just talking about individualism and being an American citizen or in a country that you live in, whatever, and something that got brought up on a podcast that I listened to. They were talking about the Roman Empire and how it failed because of wanting to stretch itself too thin in everybody else's affairs, which we do because we've got bases across the whole world.
Speaker 1:
We are trying to pretty much use the government as our nanny state and support us, when we need private business and private entities to be making decisions and not the government making all of our decisions. There's just a lot of individual things going on through my head, and when I say individual, as in, I'm concerned about where we're at as a nation. I don't care if you're Republican, Democrat or independent. That's here and there. I like having those conversations when somebody disagrees with me, Perfect, Awesome.
Speaker 1:
But when we can't be free thinkers and our mindsets are pretty much, oh, whoever's got the loudest voice I listened to, that's a problem. It doesn't matter if you're left, right, center, whatever, If you can't discern the truth and understand what is fake and what's false just because you have so much hatred towards a person or a concept or a thought, Our mindset is crap. We truly have lost our way, and the foundational aspect of our country is bring everybody together. Everybody has an opinion, Everybody has the ability for free speech. But if we can't discern what free speech is versus what's fake or what's truthful, we're in a world of hurt for a very long time and, like the Roman Empire, as more challenges become aware when I say aware as in come out and we're entrenched on either side of our thought processes it leaves the door wide open for other people to come in and pretty much wreck our country.
Speaker 1:
And that's what happened with the Roman Empire. They got so divided and so focused on what they were going to do and how they were going to change everybody's lives. They forgot how to be country, what brought them there and what brought the people together. Are we on the—are we knocking on the door of that? I don't know. I don't know if it can be turned around. I'm not saying yes or no, but I can tell you that we're not going down the right path. Can things change? Of course they can. Can they get better? Yes. Can they also get worse? Yes, but that all depends on us and our mindset.
Speaker 1:
It's okay to have different opinions, but when you have so much hate towards a specific group or person because they think a different way than you, that's where we struggle. What happened to be able to reach across the aisle—I'm not talking politics but just coming together in the middle and saying you know what I disagree, but here's why. And having that conversation, when does that leave us from a mindset perspective? It really screws us up and we get so entrenched to where we can't change a damn thing and then it will cause more issues than we want to have in our lives and that's sad. That's why I do these videos to have these open and honest conversations.
Speaker 1:
But I also want people to know that I respect your opinion or your thought. But when you put me down because of my thoughts and my opinion, that's a whole other game and that's not the way any of us need to go. We need to be open, talk about it, work on the change aspect, but, better yet, be able to disagree and move on. No hate got it, man. I got your opinion. A short video today. Guys, Thank you very much. Hope you guys stay safe, stay healthy. I'll see you guys on the other side, have a good one.
