House problems

Daily update

US Treasury Secretary “House” Bessent faces something of a housing problem. Despite Bessent’s efforts, US mortgage rates rose above 7% yesterday. The exact level is not important (except to the media, ever enraptured by round numbers). The increase erodes the spending power of new homeowners—and critically does so in a way that real income data does not capture. Inflation figures use a fictional housing cost measure, which hides the damage higher mortgage rates might do.
The EU is urging the UK to increase its domestic inflation via aggressive taxes on consumers of vehicles from China. The EU is keen to deter consumers from choosing the cars they want to buy, and is contemplating constraining UK exports unless the UK consumer is taxed until they know what is “good” for them. As arguably the world’s largest mass consumer market, regulation is the EU’s global superpower for exporters that want access to European wealth.
US Michigan consumer sentiment polls offer final September data, but include inflation expectations which always animate some interest. US August durable goods data is also due.
The summit between China’s President Xi and US President Trump has so far produced the expected outcomes for markets (i.e. nothing)—but there has been no diplomatic incident to date.