Today's housing report was a disaster vs expectations.

Numbers +- reflect the rate hike odds movement today alone.

Let's compare to a snapshot I took eleven days ago.

Rate Hike Expectations May 12

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Eleven days ago, traders were pricing in chances of five or even six hikes. The consensus estimate was a 47.4% chance of at least 4 hikes this year.

Compare the preceding chart to today's chart. There is now a small chance of no more hikes this year.

What Happened?

Reality: April New Home Sales Slide 1.5%, March Revised Sharply Lower.

I rather doubt Trump's trade shenanigans helped any.

One can also ponder this.

By the way, Rosie might need to rethink inflation as well.

Inflation watchers please note: the yield on the 10-year note is back below 3.0%.

Let's not confuse late stage inflation with a massive breakout of stagflation. For discussion, please see Reflections on Late-Stage Inflation.

Mike "Mish" Shedlock

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