So many things are happening simultaneously in the broader economy that it is hard to really fathom it all. If you stop to think about it, how did we get to this point? Is Covid truly to blame for everything? Is it related to the Biden administration? Are any of these matters manipulated from abroad? Is America starting to crumble after years of prosperity and dominance as a superpower?
A majority of those polled in a recent CNN survey found more elevated concerns for the nation’s economy than ever before. A few of the areas of alarm include rising costs of food and other goods (80 percent), supply chain disruptions (79 percent), increasing costs of housing (77 percent), growing gas prices (70 percent), and labor shortages (67 percent). Over 70 percent of respondents believe the federal government is doing too little to relieve supply chain issues. The poll also found that 72 percent felt the same regarding excessive inflation.
It’s no wonder. Inflation is at a 40 year high and doesn’t seem to be moderating. The Cass-Freight Index showed that shipping costs rose to a new record high, rising 8% in November and 44% year over year. We continue to see supply chain disruptions causing higher prices and contributing to higher costs of goods.
I was recently at one of the local ice cream parlors in town, picking up something for one of my kids. There was a prominent sign that read, “Due to Supply Chain Issues,” there is a low inventory on some products. First houses, then lumber, then cars, then appliances, and now ice cream?! Come to think of it, is anyone attempting to address these matters?!
I wish I had the answers. In this regard, I am a concerned citizen, just like everyone else. In the months before Covid, I wrote about how low real estate inventory and buyer demand pushed prices higher. The problem was only exasperated when the pandemic hit. I speak with friends and realtors in New York City and the surrounding boro’s, and they say the markets have returned with a vengeance. If that’s the case, where are all these buyers coming from?
At their December 15th meeting, the Federal Reserve announced that they would be accelerating their wind-down of the aggressive bond-buying program. In doing so, they expect to be in a position to hike (raise) rates in 2022. As of now, there are forecasts for three rate hikes next year. The Dow jumped 380 points, and the Nasdaq surged 2% on the news. Is there nothing that will halt this endless stock market rally?!
So how does this all play out, and how do all these moving parts impact the average person? Time will tell, but it’s quite evident that something ugly is lurking. At the very least, expect a very volatile 2022. In speaking with financial experts, they are encouraging a comprehensive assessment of all financial commitments and obligations on a personal and professional basis. I appreciate the opportunity to be a key partner in this process and have worked with my clients to position them for financial success in the months ahead. Buckle up!
Shout out and Happy Birthday to Zeevyah Benoff-Stein, Chaim Book, Aylon Brandwein, Adam Chill, Ron Cohen, Allyson Gur-Aryeh, Lenny Hanauer, Ilanna Heller, Miriam Hindin, David Jacobi, Shari Kanovsky, Adina Kirschner, Yossi Niazoff, Aron Pollack, Elana Rosenbaum, Dani Rubin, Dr. Joey Silverman, and Rebecca Weinstein
Shmuel Shayowitz (NMLS#19871) is President and Chief Lending Officer at Approved Funding, a privately held local mortgage banker and direct lender. Approved Funding is a mortgage company offering competitive interest rates as well as specialty niche programs on all types of Residential and Commercial properties. Shmuel has over 20 years of industry experience, including licenses and certifications as a certified mortgage underwriter, residential review appraiser, licensed real estate agent, and direct FHA specialized underwriter. He can be reached via email at [email protected].
