Workweek: The housing market is shrinking

Mortgage rates rose to 5 percent for the first time in more than a decade, the kind of increase that has caused trouble in the past for the housing market. But in the current climate, the impact of higher rates is uncertain. During the pandemic, many people, who have extra savings in their pockets and are looking for more space, are bidding on housing prices. This, combined with supply chain problems that have slowed the construction of new homes, fueled competition and made new homes unattainable. The inventory of homes for sale is still very low, and there are still more interested buyers than there are homes. But if the market doesn’t feel tight, potential homebuyers will surely do, especially those already struggling with the rising costs of food, gas, cars and other daily necessities.

In less than two weeks, Elon Musk bought more than 9% stake in Twitter, joined the board of directors, left the board of directors, and has now submitted an offer to buy the entire company for $43 billion. In Thursday’s filing with the Securities and Exchange Commission, Mr. Musk said he was not “playing a back-and-forth” and went “straight to the end” with his bid. But there seems to be more “back and forth” to come. Twitter’s board of directors on Friday adopted a so-called toxic pill to thwart Mr Musk’s takeover bid. Mr. Musk said he has a plan B if Twitter rejects his offer, but despite this he will likely face heavy scrutiny from the Securities and Exchange Commission, especially given his history of getting into trouble with the agency and the new lawsuit accusing him of delaying his disclosure of his stake in Twitter. Mr. Musk has repeatedly expressed his desire to make Twitter content less moderate, and in his filing on Thursday said he did not trust the site’s current leadership to make freedom of expression a priority on the platform.

Inflation reached 8.5 percent in the United States in March, marking the effects of the war in Ukraine, which drove up gas prices. That was the fastest 12-month rate of inflation since 1981. But economists say March could mark a peak, as fuel costs are beginning to fall and some researchers expect consumers to stop buying so many goods. The report’s bright spot was that core inflation, which is unaffected by volatile food and fuel prices, was slightly lower in March compared to the previous month. Lyle Brainard, Federal Reserve Governor, said he was “very welcome” to see a moderation in that number.

Russia faces a payment deadline and, due to Western sanctions, may not be able to meet its obligations. This month, the Russian government repaid nearly $650 million of dollar-denominated debt in rubles. As a result, Standard & Poor’s Global placed the country under a “default selective” rating. Other ratings agency Moody’s said Thursday that the country could be considered in default if it does not find a way to pay its foreign-currency bonds in dollars instead of rubles. Russia has a 30-day grace period for getting the money in dollars, but that window closes on May 4, at which point Russia could default on its foreign currency debt for the first time in more than a century.

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