Dually Licensed Marilyn
Dually LicensedForum Replies Created
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Can you provide examples of AI oversight failures and their consequences?
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Can you elaborate on the risks of insufficient human oversight?
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How can AI be used ethically to improve content creation?
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Can you give examples of manipulative AI-generated content?
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Wouldn’t it great if the United States was not so extremely divided between democrats versus Republicans? The two parties HATE each other. Democrats do not talk about nor post anything about what Republicans support and vice versa especially in the media. Each party is willing to lie and hide the truth even if it benefits the American people. It’s great to see a liberal media platform like The Turks talk about what a LIAR California Governor Gavin Newsom is. Kudos. I always liked the Podcasters of The Turks.
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The Federal Reserve Board needs to be shut down. The Federal Reserve Board benefits the rich and the world’s elite
, such as the Rothschilds, George Soros, Bill Gates, and
politicians. The Fed can print money without any backing, such as gold and silver. The Fed is the sole reason for skyrocketing inflation. Can you explain the negatives of the Fed and why it should be shut down?
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When are these new regulations expected to take effect?
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Can you elaborate on the new regulations for mortgage lending transparency?
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According to some economists and researchers, the possibility that mortgage interest rates will be less than 4% or near 3% by 2024 seems unrealistic. This is solely because the economy does not support such drastic changes. For such changes to occur, several key parameters must be met. In the current situation, that is not likely to happen.
Merger Mortgage: The Key Drivers
The federal policies, business activities, and the intriguing state of the economy all combine to shift or reduce the applied rates. Considering the key parameters needed to attain a state where mortgage rates are below 4% or 3% by 2024.
Some of these key requirements include the following:
Pivotal Policy Decisions By The Federal Reserve
A Change in the Fund Rate:
- If mortgage rates were to drop substantially, the United States government would have to significantly cut the federal fund rate, which is only possible during economic crises.
- Secondly, Investors would be required to change their preferences and expect inflation to remain steady at or close to 2%.
- Again, this is an unrealistic expectation.
- Lately, housing and energy prices have gone out of control, which will pressure monetary policy to act sooner rather than later.
- The Fed has been more accommodating in recent months by cutting rates.
- Still, with inflation dropping, rates below 4 percent in 2024 seem ambitious.
Treasury Yields
10-Year Treasury Bonds
- Mortgage rates strongly correlate with the yield’s performance on 10-year US treasury bonds.
- For mortgage rates to fall below 4%, the yield on 10-year Treasuries has to be much lower, at approximately 2.5% or lower.
Market Conditions:
- In the current market condition, Bonds are likely to fall in price only if there is a strong change in investor behaviors, such as during a global downturn.
Likelihood:
- Economic activity remains high, and the Federal Reserve’s tightening policy negates any possibility of a yield decrease.
Economic Growth and Recession Risk
Severe Economic Downturn:
- During a severe economic downtrend, the market would be able to believe that there is a strong need to encourage growth, which would force the Federal Reserve to lower the interest rate.
- A Chicago Federal Reserve report focuses on how job cuts have reduced consumer spending.
- More dominant household housing market corrections than persisting low rates.
Likelihood:
- The probability of a simultaneous recession in the US has increased compared to the past, as several analysts expect the growth rate to nosedive to a staggering 2024%.
- Yet, in the past, the US economy has always remained quite substantial, which has resulted in a sound recovery.
Housing Market Dynamics
Affordability Pressures:
- The 2023 mortgage rate is above 7%, which has acted as a barrier to entry into the housing market for many potential buyers, resulting in a decrease in house sales.
- However, if rates are lowered, it might increase the demand for properties, which will increase the prices of those properties again, so it is a double-edged sword.
Supply Restrictions
Low inventory is a continued issue, and due to these low inventories, the lower rates on loans may not be beneficial.
Factors That Will Adversely Affect Sub-4% Mortgage Rates In 2024
Federal Deficit And Debt
- There are worries about the US government’s debt and its impact on borrowing.
- It increases the budgets on Treasury Bills, resulting in increased earning rates, which is much higher than the US government needs.
Widening Deficits
Widening deficits will not allow rates to drop significantly and hence cause extreme rates and stability.
Global Issues
Biden has been targeting a boost in the economy and fixing relationships with other countries to improve trade. The goal has been to eliminate possible instability in the economies of different countries and to keep good relations with all of them so that there is no adversary or tension in the markets.
Concerns Within The Banking Sector
Specifically, in the US, with regional banks and lenders, when financial conditions tighten or difficult circumstances arise, banks are reluctant to cut rates, ultimately leading to a reduced consumer base with access to borrowing funds.
Caution and Skepticism
Skepticism also needs to be considered due to overconfidence:
- People started to assume that as the economy improved, interest rates would follow a range in 2021.
- However, that wasn’t the case, and many economists had warned about this change as an example.
Aggressive Approach Forecast
Today’s economic conditions, such as strong employment opportunities and housing unavailability, make sub-4% rates appear as far too rosy projections.
While mortgage rates can go below 4% in 2024, this perspective is not practical since it would mean the US economy is going through a recession or the monetary policy is very expansionary, which is not present today.
Prospective homeowners or those looking to refinance their mortgages should keep a close eye on the market rather than wait for rates to fall below 4.0%. It would be unwise to expect reality to reach such low rate targets or other financial situations that would enable it.