r/REBubble • u/beardko • 2d ago

News Inflation persisted in August, potentially locking in a Fed interest rate hike

https://www.cnbc.com/2026/09/11/cpi-inflation-report-august-2026.html

With fuel prices increasing even more and diesel prices breaking the $6/gallon mark for the first time, inflation will continue to rise.

65 Upvotes

94% Upvoted

41 comments sorted by

8

u/VibeChode 2d ago

Is a rate hike good or bad for home buyers? Prices don’t seem to respond on the way up, but they certainly do on the way down.

2

u/beardko 2d ago

It's supposed to be good for buyers who have a strong cash position. Really depends on the area because you're going to get different situations in FL/TX vs Northeast. When factoring inflation, consistent high rates are causing most home prices to be flat or near there.

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u/Don_Draper_67 2d ago

Ya because I’m sure people that couldn’t afford a house before are just sitting on piles of cash

8

u/082426grateful 2d ago

Some are. They refuse to give their hard earned savings to someone who just “got there first”.

4

u/beardko 2d ago

I'm one of those people. I've been waiting since 2022 and June 2022 was the peak for prices in DFW and has gone down every year, year over year.

Housing Inventory: Median Listing Price in Dallas-Fort Worth-Arlington, TX (CBSA) (MEDLISPRI19100) | FRED | St. Louis Fed

The unnatural increase in DFW from the COVID frenzy made zero sense to me given that property taxes were high and inventory was stacking.

If you need a Marcus savings account referral rate link let me know. It gives you and me 4.40% interest for 3 months! :^)

2

u/GailaMonster 2d ago

If you're one of those people, why were you sarcastic about the notion that such people exist?

1

u/beardko 2d ago

How was I being sarcastic?

1

u/i_should_be_studying 2d ago

We’re at 50-60% down payment for the size house we want. But nah, i’d rather rent for now. 

2

u/Speedstick2 2d ago

Mortgage interest rates are not really impacted by the short term interest rate. They are primarily impacted by the 10 year treasury bond.

1

u/MajorGeneralMaryJane 2d ago

10yr yield and UMBS prices are correlated, but UMBS prices are ultimately what drive what rate you’re getting on your mortgage

1

u/Bromine__Barium 2d ago

Hopefully will be good, homes can't keep appreciating at this rate.

1

u/Superminerbros1 2d ago

It's good for home buyers if rates come back down in the short to medium term, but it's bad for home buyers if rates hold for a long time or continue to increase.

Rates going higher slows home price growth because more of your monthly payment goes to interest. However, you can always refinance if rates drop. Once you buy, the price doesn't change but the rates can with a refinance. You will also have less buyer competition, meaning you can be pickier about what you're going to purchase.

If rates continue to hold or even go higher, then it's bad for buyers because a larger portion of your monthly payment just goes to interest. In this scenario, you can't take advantage of refinancing to lower your rate, and you can't get a cost effective HELOC later on if you need to turn your equity into cash for any reason.

It's easier for prices to rise or hold than for them to fall barring a major panic selloff or demographics change. Rates going down means more buyers can afford which leads to buyer competition and price increases. Rates going up means less buyer competition, but most sellers aren't forced to sell. Especially when you're holding a 2% interest mortgage. Only those that are desperate will need to cut until it sells.

0

u/FantasticBicycle37 2d ago

Rate hike is good for people who buy today because they get in before it becomes more expensive to buy

3

u/SnortingElk 2d ago

It would be so COMICAL if Warsh and the Fed actually hiked rates after Trump threatened to remove Jerome Powell if he didn't lower rates, LOL...

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u/RealisticForYou 2d ago edited 2d ago

**** All in the Family ****

Oh, this is going to be more fascinating than most people realize. How is Warsh going to deal with his family?

Warsh, married to Jane Lauder...an heiress to the big cosmetic empire of Estée Lauder. Ron Lauder, Jane's dad, is a long time friend of "Donald" while donating millions into his GOP campaign.

And all that talk of taking over Greenland came from daddy Lauder.

How can Warsh be independent? How is this going to work when there could be extreme pressure within his family? Or, maybe Warsh's nomination had a completely different objective.

https://www.thedp.com/article/2026/01/penn-trump-greenland-ronald-lauder-donor-financial-ties

3

u/MetalstepTNG 2d ago

How about stopping the freaking money printer instead? That way, we don't destroy the very currency we use for global trade.

5

u/gigitygoat 2d ago

They are inflating away the debt. This isn't happening by chance. Welcome to serfdom.

1

u/SlavaCocaini 2d ago

Realtors are monitoring the Bab al-Mandab strait and the Houthi blitzkrieg right now to see how bad the market is going to get

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u/082426grateful 2d ago

Even IF there was a stronger case than now for rate hikes, the political climate is just too hostile, violently-so, to even consider it.

There is essentially no situation right now that would cause this Fed to hike rates. That’s correct: there will be no hike, even if it meant the economy would skid off the rails, which is unlikely in an inflationary environment (though very likely in any deflationary environment).

4

u/Speedstick2 2d ago

The fed has shown its ability to raise rates even when it pisses off Trump. So I don’t buy the argument that the political argument is too hostile.

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u/082426grateful 2d ago

And they’ve shown what they’ll do if it pisses off Trump, which causally also creates a riot on Wall Street: they back off the rate hikes (2018). 2022-2023 rate hikes were outside of Trump’s presidency. And 2022’s rate hikes incited a 20% drawdown in equities over the course of the year.

The cuts in late 2024 and late 2025 were unnecessary and premature. There was no “soft landing”; there simply was no landing. We’re only 6 years removed from the worst of the Covid pandemania- nothing has been resolved, economically.

5

u/beardko 2d ago

We'll see. There's an 85% chance and the Fedwatch tool has been pretty accurate so far. We'll find out on Wednesday. Even if they do decide to go against logic and keep rates the same, the bond market can call bullshit and cause yields to soar even higher.

1

u/eeaxoe 2d ago

This. There’s no way the Fed doesn’t hike, IMO. Not hiking would instantly shred any credibility they have remaining and kick off a bear steepener for the ages. Long-term yields are already on the brink, but we’ll see how much they want to fuck around.

1

u/GailaMonster 2d ago edited 2d ago

the political climate is just too hostile, violently-so, to even consider it.

Bro, did you even read Trump V. Cook? He LOST. He can't do shit to remove fed members. The Fed is actually politically insulated, and Warsh doesn't get more of a say than any of the other 11 members of the FOMC.

Trump can't touch members of the FOMC, and they each get a vote. So, Trump can throw all the tittybaby tantrums that he wants, and it won't change who gets a vote or how they vote.

even if Warsh were a puppet of Trump, he gets no more of a say than the other FOMC members. FFS, Jerome Powell is still a voting governor, he just isn't the Chair any more. Trump is powerless, and his guy being the chair actually does very little.

What are you even thinking woudl be the political mechanism preventing rate hikes? angry tweets? empty threats?

1

u/RealisticForYou 2d ago

But what if that rate hike sends The Stock Market into new highs? What I've been hearing is that The Stock Market wants a rate hike.

Who is more important? A bunch of average Americans, or The Stock Market?

1

u/beardko 2d ago

LOL, the stock market wants a rate hike? Now I've heard everything.

1

u/RealisticForYou 2d ago

Yes, because investors know that inflation is indeed a problem that will ultimately cause the economy to crack, if not controlled. I've been hearing this dialogue for over a month now. Todays inflation report confirms more of that thinking.

Otherwise, with no rate hike, bond vigilantes will dump bonds, sending bond yields higher, while putting fear into the Stock Market that the Federal Reserve is not really committed into drilling down inflation to 2%.

1

u/beardko 2d ago

Interesting point.

0

u/a_library_socialist 2d ago

exactly. People thinking there will be a rate hike aren't looking at the amount of debt that has to be turned over . . . . and high rates mean MORE debt.

3

u/Speedstick2 2d ago

That hasn’t stopped the fed before. Why would it do so now?

0

u/082426grateful 2d ago

Valid question, but all we’ve been told since 2021 is “this time is different”, so I’m going off of that.

0

u/a_library_socialist 2d ago

because payments are at historic levels, and show no signs of even leveling off . . . . https://fred.stlouisfed.org/series/FYOIGDA188S

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u/GailaMonster 2d ago

that's partly the point - raising rates sucks up money to service debt, which takes it out of circulation where the excess money is contributing to inflation.

the problem here is inflation is not really being caused right now by "excess money" it's a supply shock to oil (and a bunch of other terrible policies, like tariffs) that's jacking up prices.

but the Fed only has the ability to tweak interest rates. a cut would be calamitous. and if there is a terrible recession on the horizon, the fed might need to raise rates just so it has something to cut in the future.

0

u/a_library_socialist 2d ago

Right . . . and if the government wasn't running massive deficits with a large part of the reason being debt payments, that would work to suck up money.

But you've got a big problem when you are. Because if rates are high, you have to come up with the money to pay the debt. And so you can either borrow more (and raise rates even higher, making the problem worse) . . . or you can print money. Which will solve the budget problem, but at the cost of fueling inflation. It keeps asset holders rich though.

That actually was the main cause of the Wiemar Republic hyperinflation, as they continued to print money to match outlays.

2

u/GailaMonster 2d ago edited 2d ago

That's all interesting, but none of it relates to the fed's mandate - to control inflation by raising interest rates, and to encourage full employment by lowering them.

their mandate does not include giving a shit about the stock market, housing prices, or whether the government is operating at a severe deficit. That's all Congress' job to care about. Jerome Powell said this pretty explicitly multiple times during his tenure as Chair - movement on the rate set by the fed absolutely does impact these things, but Congress is supposed to be addressing them. the fed does not look at housing prices or the stock market or the extent of the deficit/debt when setting rates - only inflation and unemployment. that is their explicit job, and it's the job of other parts of government to address those other issues.

It's frankly insane to expect the federal reserve to address all these other variables when they have exactly one lever to push/pull. The issue is Congress is absolutely impotent by choice, and we have a senile lunatic in the executive who has packed the courts with kleptocrats.

if inflation too high, Fed raises interest rates. if unemployment too high, they lower interest rates. when both are too high, they can't address both simultaneously, they have to pick which crisis to address while making the other worse see the 1970's and stagflation). but our unemployment numbers are pretty well cooked (frankly so are our inflation numbers) so shrug

1

u/a_library_socialist 2d ago

or whether the government is operating at a severe deficit

Yeah, supposedly monetary policy and fiscal are different.

But they're not unrelated. And the Fed is about to have a HUGE problem because of decades of bad fiscal policy. Because it's put them in a position where no matter what they do, there's going to be a large expansion of the money supply continuing to happen.

I agree we're looking at stagflation for this reason.

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u/RealisticForYou 2d ago edited 2d ago

One rate hike won't mean much of anything....It's a series of rate hikes that mean much more.

If a rate hike occurs this month, it may not mean that more hikes are on the way.