Apparently China is not paying interest on its sovereign debt… What is it waiting for? If you’re waiting for lower rates to give your business a “shot in the arm,” the next few months may be difficult, but there is good news. The persistence of stubborn inflation is causing U.S. and European officials to tighten monetary policy. With both the Federal Reserve and the European Central Bank expected to raise interest rates in July, an aggregate measure of borrowing costs indicates a peak of 6.25% in the current quarter, highlighting a shift from the previous projection of 6%. Despite that, new home sales are surging, home prices are rising, and prospective buyers are engaging (as if they ever stopped) in bidding wars again. But U.S. housing prices have led to higher shelter costs and complicate the Federal Reserve’s fight against inflation. Barron’s discusses this in, “How a Housing Rebound Could Impact the Fed’s Path Forward.” Is the huge overhang of housing supply from the 2000-2007 housing bubble not fully absorbed? Yes, higher rates have impacted affordability, but, historically, LOs know that high rates don’t necessarily impact peoples’ desire to own a home. If rates go up a lot, good LOs will help with good programs, and some people will buy smaller homes. But they will still buy homes. (Today’s podcast can be found here and this week’s is sponsored by Gallus, the premier business intelligence tool for the mortgage industry. With hassle-free insights and user-friendly functionality, Gallus empowers you to make faster, data-driven decisions for enhanced profitability. Hear an interview with Jeremy Potter on the shift toward innovative lending practices and new underwriting standards.)