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Chart: 30-Year Fixed Rates And M2 Money Velocity

Spike in Repo
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EDITOR NOTE: Aren’t low rates supposed to entice borrowing and spending? That’s what mainstream economics would tell you. That’s why the Fed sets interest rates. Well, real estate tells a different story. Mortgage rates are crashing, yet so is demand. Money velocity--the speed by which your dollar exchanges hands in a flurry of purchases--is crashing too. Hardly anybody is borrowing or spending. Money refuses to flow at the rate necessary to bump up GDP. By mainstream standards, that’s a stark sign that speaks little to no recovery.

I never thought I would see this. 30Y fixed-rates for mortgages are crashing with crashing M2 Money velocity.

Powell’s face is the symbol of failure.

Originally posted on Confounded Interest

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