The US was in a housing recession for 38 months (3 years and 2 months). Comically, no one noticed. The Keystone Speculator's Housing Market Indicator signaled the US housing recession starting 12/20/22 and ending 2/18/26. A housing recovery begins in February 2026 through the present, June 2026 (the chart shows the red line above the green line), but a likely failure back into a double-dip housing recession is on tap starting next month, July 2026.
It is a shame the government shutdowns occurred in the Fall and into early this year since it was an important time to have good data. A few more months need to play out before confidence is completely restored in the numbers. The 1.177 million housing starts yesterday, 6/16/26, was a jaw-dropper. The housing numbers fell off a cliff but you also wonder if the government shutdown is still impacting the data.
Are you a homeowner or a home moaner? People do not want to leave their current home, that has a low mortgage rate, for a new home with a bigger monthly payment. The lower availability of homes on the market hurts the first-time homebuyers. Also, hedge funds and other institutional investors have purchased a lot of real estate over the last decade.
The United States has experienced housing, labor and manufacturing recessions for the last 2 to 4 years but no overall US economic recession. Go figure. Anytime in decades past, those three sectors in recession guaranteed an overall US economic recession. It is different this time. The rise of AI pushes back against the recession negativity. In addition, the Fed's easy money printing for the last two decades has made the wealthy class filthy rich (and they continue to spend and support the economy) since most of the money flows into the stock market. Too bad that one-half of Americans do not own a single share of stock.
30 million Americans at the top control the rigged crony capitalism system and raped the US for all its worth since the 1970's. The crony capitalism filth cannot be fixed and is in its final throes. The middle class was destroyed along the way and that was the glue that used to holed the country together. Now it is 30 million upper class and elite controlling the 300 million peons at the bottom. The vast wealth created for the privileged class due to the Fed's money printing has the rich folks continuing to spend money and support the economy.
Thus, despite the housing, labor and manufacturing recessions, an overall US recession did not occur because of the AI glory and the rich folks spending money due to the wealth effect (they see their stock accounts with big gains so they spend money without thinking about it). Isn't it sickening how the 30 million at the top shafted the rest of the country? Oh well, too late now.
Stupid people comment on elections and discuss the policies by candidates. What for? None of that matters now. People will simply vote for whoever gives them money since the 300 million at the bottom cannot make ends meet anymore. This is easy to understand, folks. It is not rocket science, and Keystone knows rocket science.
Today is Federal Reserve Chairman Warsh's debut performance taking over the top spot from Jerome Powell that will stay on as a governor. Warsh may be asking himself this morning why he wanted the job. Those concerns disappear once he sees the free buffet. There is a jelly doughnut stain on his tie but it will come out in the warsh.
Many of us remember Warsh as a hawk going against the bailouts and the Fed's money-printing back in 2007-2009. However, that all changed as he started flapping dovish wings in front of King Chump vying for the chairman job. Which Warsh will show up today at the press conference?
The answer may be simpler than people think. As stated above, the US housing recession will likely restart next month. How do you know that? For the above chart to remain in a housing recovery, 1.6 million housing starts will need to be reported on 7/17/26. That is a tall order since the data is sliding lower for two months and the big drop below 1.2 million units occurs yesterday. It is not going to happen. The starts will likely come in at 1.1 to 1.4 million and that will send the chart back into a housing recession so circle 7/17/26 on your calendar. Keystone still uses a paper calendar but most of you young folks use your calendar smartphone.
Okay, so a housing recession will likely start back up again. That is not good and typically the Fed will lower rates to give some life to the housing sector. What? Everyone is on the inflation bandwagon now and expects the Fed to either remain on hold or contemplate a rate hike.
Look at the CRB and GTX commodity charts (punch in $CRB and $GTX into stockcharts.com) and you will see the huge pullback in commodities. It makes sense since oil is pulling back but many commodities are relaxing lower. This is goods inflation dropping and some of this savings will ripple into services inflation helping to moderate prices (if a company added a fuel charge due to Donnie Chump's Iran War, they will likely be taking it back off now).
Are you starting to gather these ideas together in your head to figure out Warsh's plan forward? Warsh has his personal indicators and technicals so it is a safe bet that he sees what Keystone sees above. Warsh also sees commodities dropping like a stone that means the inflation scare is likely overdone going forward (unless the Iran War blows up again). Thus, mathematicians say thus and therefore a lot that is why Keystone was not invited to the UFC event at the Whitehouse, with inflation not the big deal that people think it is going forward, and the country slipping back into a housing recession, means rate cuts should not be taken off the table this year. What!!? This guy must be smoking something.
This goes against the universal consensus although Citi is taking a lot of heat for leaning against rate hikes this year and favoring the possibility of a cut or cuts. Thus, Warsh will likely maintain the status quo, stay on hold with rates, no one will be surprised, but they likely will be as he may lean against everyone that is saying a rate hike is on tap this year. That would make Warsh slightly dovish if he factors in the above.
If Warsh is hawkish and hitches his wagon to the rate hike post, that will likely already be a policy mistake on his first day (first presser) on the job. If Warsh was smart, he would remain on hold and not commit to a hike bias. It would be wise to simply remain on hold and equally biased towards a cut or hike. Any hint of dovishness will likely send the stock market higher. If he hints that he likes the rate hike path forward better, stocks will likely sell off. The stock market is in a major topping process so it would not be surprising to see stocks sell off no matter what Warsh says. The Fed decision is at 2 PM EST and the much-awaited press conference begins at 2:30 PM EST (tentatively). Will Warsh be wearing hawkish or dovish wings? Band on the Run by Wings.
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