Rates Driven by Household Formation for Next Decade, Says Smead

The transcript discusses the impact of millennial household formation on future interest rates, predicting a rise due to increased demand. It compares current low mortgage rates to historically higher rates, emphasizing that 4.5% is low compared to past decades. The discussion also covers market reactions to Fed policies, particularly Jerome Powell's statements, and the anticipation of interest rate hikes in 2018.

What demographic trend is expected to influence interest rates over the next decade?

• Increase in millennial household formation

• Decline in urbanization

• Decrease in global population

• Rise in retirement rates

How do current mortgage rates compare to those in the late 70s and early 80s?

• They are significantly higher now

• They are about the same

• They have remained unchanged

• They are significantly lower now

What is the market's current expectation for interest rate hikes in 2018?

• No hikes expected

• Possibility of a fourth hike

• One hike expected

• Two hikes expected

What was notable about Chairman Powell's communication style according to the transcript?

• He was unclear and ambiguous

• He used complex financial jargon

• He spoke in plain English

• He avoided discussing interest rates

What was the market's reaction to Powell's statements?

• Confusion and uncertainty

• Clear understanding and anticipation

• Indifference

• Immediate panic