WORD ON THE STREET 

TIME FOR THE FED TO GO BIG OR GO HOME

• Oh, And That Home Is Rapidly Depreciating – The global chief investment officer of Hines reports that prices have fallen about 5 to 10 percent in some areas. The 30-year mortgage rate is up to 6.28% compared to 5.5% just one week ago. So real estate prices are declining… but renters looking to buy are still going to have a hard time.

• A Full Percentage Point – The Wall Street Journal reported the Fed is considering making “interest rates even higher and faster than already expected.” Current expectations are for a 0.75% increase, not just half a point. You see the problem. If the Fed wants to communicate its seriousness about inflation, it’s now going to need to top that. The once almost unimaginable prospect of a full percentage point increase is on the table.

• Wholesale Prices Surging Near Record Levels – The Bureau of Labor Statistics reported that the producer price index has risen 10.8% over the past year.  Why does this matter? This benchmark has a far more direct link to consumer prices… which may be the main thing the Fed has on its mind this morning. It may also be the main issue in November’s elections. And on that note…

• GOP Flips Democratic Seat In The House – Get ready for a lot more talk about that “Red Wave” coming our way. Republican Mayra Flores beat Democrat Daniel Sanchez. It was an open seat, as Democratic Rep. Filemon Vela resigned to take a job in the private sector. Should Democrats panic? Not necessarily. The district will be gone in a few months because congressional districts themselves are being redrawn in Texas. The new, redrawn 34th district is expected to be far more supportive of Democrats. Rep. Flores’s victory was so impressive that she dodged the need for a runoff… but she will have to fight even harder to stay in Congress past November.

HOT SPOTS: What’s Going on in Geopolitics

• Pope Suggests War In Ukraine May Have Been Provoked – Pope Francis is sure to turn some heads in Europe with his latest take on the Russian invasion of Ukraine. While calling the war “monstrous,” Pope Francis said that NATO “barking at the gates of Russia” may have contributed to its cause. “We do not see the whole drama that is unfolding behind this war, which was perhaps in some way either provoked or not prevented,” he said. He further warned against “reducing complexity to the distinction between good and bad, without thinking about roots and interests, which are very complex.” It’s indeed a confusing time when the pope is warning us about making moral judgments.

• POTUS Flip-flop On Saudi Arabia – During the presidential campaign, then candidate Joe Biden said he would make Saudi Arabia’s Crown Prince Mohammed bin Salman a “pariah.” The crown prince allegedly ordered the murder of journalist Jamal Khashoggi, making him toxic in Washington. However, desperate to bring down fuel costs, that has changed. A Biden administration official confirmed that “we can expect the president to see the crown prince.”

• Ukraine Sends Its Sensitive Data Out Of The Country – As Russian forces continue their slow motion offensive, Ukrainian officials are taking measures to prevent a worst-case scenario. Government data is being transferred to data centers in other countries, notably in Poland. Further negotiations are underway – and around 150 registries have already been moved abroad or may be soon.  Meanwhile, on a related note at home…

CUTTING EDGE: What‘s Happening In Tech

• Massive Medical Records Hack – Don’t worry, it’s just the most important private information imaginable. Kaiser Permanente, the single biggest nonprofit health care provider in the United States, has suffered a major data breach. The health records of just under 70,000 people were exposed, including sensitive info like lab test results. The good news? No financially sensitive information was leaked… according to them anyway.

• FDA Board Gives Thumbs Up To MRNA Vaccine For Kids – A board of experts that will heavily influence the FDA’s final decision endorsed a COVID-19 vaccine created by Moderna (MRNA) with a unanimous vote. The two-step vaccine is designed for those aged six to 17. This may also be an indication of how the same board will vote regarding vaccines for those under five created by MRNA and Prfizer (PFE) next week. The FDA itself is expected to consider a final ruling for these products later this month. For some biotech investors, a whole new revenue stream may open up.

• The End Of The A-10? – The Air Force has been trying to ditch the beloved A-10 “Warthog” for some time – but Congress keeps stopping it. Seriously, the Air Force tried to scrap the venerable close air support vehicle beginning in 2015. However, the House Armed Services Committee is ready to allow two dozen jets to be retired and be replaced by F-16s. That could be the precursor to retiring the remaining 250 A-10s or so left.