The Mortgage Bankers Association’s chief economist, Douglas Duncan said that the trigger for price declines is always the loss of jobs and doesn’t see a slowdown in employment, “not until 2006.” He predicts that 2005 will set records “and only an unexpected roadblock of monumental size will slow its pace”
Well, we may have a potential roadblock, sort of. Oil Prices have often been a trigger for inflation and higher long term rates such as mortgages.
Then why isn’t it happening now?
Well, here’s a thought…after adjusting for inflation, we are still well below [inflation-adjusted oil prices](http://inflationdata.com/inflation/Inflation_Rate/Historical_Oil_Prices_Table.asp) that peaked at $94 per share in 1980. Core inflation is still within the Fed’s confort zone but [energy prices are rising](http://www.marketwatch.com/news/story.asp?siteid=mktw&dist=nwtam&guid=%7B2AF7F405%2DBD16%2D48D9%2DB0D1%2D6C323AFAE571%7D).
Tags: David Duncan
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