Part 2/8:
Ed Dow opens the discussion with a focus on the U.S. housing market, citing a striking 268% increase in inventory across states like Florida and Texas. He attributes this surge to high mortgage rates and a downturn in affordability, making it more cost-effective for many to rent rather than buy.
Dow emphasizes that the housing sector could be a leading indicator of a looming economic downturn, as low pending sales and construction permits suggest a forthcoming correction in prices. He believes that market corrections will eventually prompt the Federal Reserve (the Fed) to cut interest rates, leading to what he predicts will be a deflationary environment throughout 2025.