This week’s issue presented by Ridge Lending Group
What happened…
The federal government is still closed for business. Week 4 just started. No deal, no paychecks, no data. Agencies like BLS, BEA, and HUD have gone dark. That means no jobs report, no CPI, no housing starts. The Fed’s flying blind.
Over 900,000 federal workers are furloughed. Economic visibility just dropped to near-zero.
Takeaways…
$15B/week: That’s the cost of this shutdown. But silence is saving doves from heat.
0 CPI reports: Without inflation data, hawks can’t scream. Rate cut odds jumped this week.
18 days and counting: The Fed hasn’t had clean labor data since September.
Zero housing data: Builders, brokers, and lenders are guessing. That stalls deals—or sparks bargains.
3 letters missing: BLS, BEA, and HUD—data blackouts from all three.
Explain Like I’m 12…
It’s like playing poker with your own cards face down… and still having to bet.
What this releases…
Watch the Fed’s next move: Without new inflation numbers, Powell might cut rates sooner—just to play it safe.
Expect a new storyline: If the Fed lowers rates now, it signals: “We don’t need proof to ease.” That gives cover to every dovish economist and rate-sensitive sector to push harder.
Why it matters…
Borrowers get a break: Lower rates mean cheaper mortgages, business loans, and credit lines. That’s real money saved.
Savers eat the cost: If the Fed cuts too early and inflation returns, your cash loses more value sitting still.
Backroom breakdown…
This isn’t just dysfunction—it’s protection. Elites get a hall pass. The Fed avoids being boxed in by hot prints. Politicians score with posturing. Wall Street? Quietly cheering the data freeze—it delays bad headlines.
Real estate angle…
Fewer reports = more guesswork. That spooks underwriters but excites cash buyers. If HUD stays dark, deal approvals back up. If Powell cuts early, cap rates may follow. But only fools buy blind—watch your carry.
Move or miss?
Tighten your underwriting rules for Q4. No assumptions. No auto-renews. Want help? Run your next property through (RidgeLendingGroup.com) for optimal financing, or… get tactical support (CashFlowSavvy.com) before policy and Fed cuts push comps higher.
Lurking in the Shadows:
👟 Fed Pivot? Market Says It’s Coming
Wall Street’s betting Powell cuts rates next week. CPI came in soft—3.0% vs 3.1% expected—and traders now price in a near 100% chance of a cut. Doves smell blood.
💡 Why you should care:
Lower rates could reheat buyer demand, shrink cap rates, and shift your loan math overnight.
👟 Gold Breaks, Fast and Hard
After a record run above $4,300/oz, gold crashed 6.3% in one day—its steepest drop in 12 years. The move rattled inflation hedgers and sparked chatter about liquidity risks.
💡 Why you should care:
When safe havens crack, investors flee to cash—or real estate. Be ready to catch.
👟 Oil Spikes on U.S. Sanctions Shot
The U.S. slapped sanctions on Russia’s top oil firms. Brent jumped 7% this week, raising fears of higher gas, shipping, and input costs—again.
💡 Why you should care:
Energy inflation bleeds into housing costs and rate policy. That spillover hits builders and borrowers fast.
On The Radar…
👤 “Big Short” Burry Bets on a Market Bust
Michael Burry’s fund loaded $1.6B in put options (~93% of his portfolio) against the S&P 500 and Nasdaq. If equities crack, credit tightens—real estate feels the liquidity squeeze.
💵 U.S. Interest Bill Hits $1T+
Record $1.03 trillion spent on debt payments—crowding out real investment and rate cuts.
The Treasury’s borrowing binge is now Wall Street’s inflation hedge.
🏢 Office Defaults Keep Climbing
NYC skyscraper missed a $180M payment—office loan delinquencies now at 8.1% and rising.
This isn’t a blip; distress is spreading beyond “zombie towers.”
🗾 Japan’s First Female PM Elected
Sanae Takaichi takes power, vows stimulus—investors eye Japanese capital flows and FX shifts.
Abe-style easing could send more Japanese money hunting U.S. assets.
🏘 Mortgage Rates Dip to 6.19%
That’s the lowest in over a year. 4.1% uptick in home sales followed fast.
Refis aren’t booming yet, but buyer traffic just woke up (slightly).
🍖 Beyond Meat Explodes, Then Tanks
Stock spiked 1,300% in 4 days, then crashed—speculators are back, and jittery.
When memes pump, it’s often the last gasp before a rotation.
🇨🇦 Trump Kills Canada Trade Talks
After a Reagan quote ad, Trump blew up negotiations. Watch for tariff spillover on lumber.
Builders could feel this first—framing costs were already up 17% YoY.
🖇 The Connection
When the lights go out, power shifts.
This week, the federal government shut down key data—CPI, jobs, even HUD reports. That blackout comes just as the Fed eyes a rate cut, with traders betting on a 100% chance. Meanwhile, $1.03 trillion in interest payments just leaked out the back door. And gold? After soaring past $4,300, it cratered 6.3% in a day—a flash signal of stress, not strength.
This is a power outage in plain sight. When the scoreboard’s unplugged, policy gets made in the dark. And the loudest voices? They're the ones with assets to protect, not answers to share.
For investors, this means models get murkier, but incentives get clearer: cheap money is coming back—not because it should, but because no one can prove it shouldn’t. The debt load demands it. The missing data enables it. And the Fed’s silence rewards it.
Watch what fills the vacuum. Rate cuts with no receipts. Market melt-ups off no earnings. Policy moves built on vibes. This is when bad calls feel safe—and fast moves pay.
What to watch next:
If the Fed cuts while blind, asset markets may front-run policy with zero guardrails. For real estate, that’s tailwind now… turbulence later.
#️Number of the Week
$1,030,000,000,000
That’s what the U.S. just spent on interest payments—more than defense, Medicare, or Social Security.
Guess who still says we can “afford” more stimulus?
🎯 The Hit List!
✅ Front-run Powell
Rate cut odds hit 100% with no fresh data to fight it.
Run your refi math now—before the market does it for you.
✅ Sniff for smoke
Gold dropped 6.3% in a day after hitting $4,300.
When safety trades crack, the panic trade isn’t far behind.
✅ Audit your debt
The government just spent $1T+ to service its own.
Check your loan costs before they checkmate you.
✅ Watch the oil leak
U.S. sanctions lit a fire under crude—+7% this week.
Track build and delivery costs—especially if you’re in development.
✅ Probe the shadows
Office defaults jumped to 8.1% delinquent.
If you’re holding CRE, tighten your assumptions and check the lease rolls.
🚪 Closer
Jerome Powell’s new rate strategy: “If we can’t see the numbers, are they even real?”
