Terrific”Quite curious” I said out loud to myself as I sat in the gravel on the side of the road. I was staring at the empty water bottle cage on my overturned bike. I had stopped to change a tube after pulling a staple out of my front tire, so the upside down bicycle was actually on purpose this time.  What had me bewildered was that I started my ride to Wallsburg this morning with two full water bottles and now there was only one. Ironically, I had wondered to myself several times on the way up the canyon how it was that so many people had lost so many things along the side of the highway. You don’t really see all the clutter when you’re driving at 65 mph, but your perspective changes when you’re on the opposite side of the white line, traveling a fraction of car speed.

Now I was one of those people who had mysteriously lost something to the garbage gathering force of Highway 189. The befuddlement I was experiencing was in trying to calculate the sheer physics necessary for a 12″ bottle to jump vertically out of the grasp of a 6″ cage without getting hung up on the top tube, hitting my legs, or my rear tire, or worse yet the spokes.

“It is true” I thought to myself (because I no longer felt the need to speak out loud with no one around me but bell-wearing sheep) “that the bottle had been frozen when placed in the cage 90 minutes before this moment, and since then I had ascended over 1200 feet in elevation. So it’s possible that a combination of the now warmer water and lower air pressure allowed the bottle to contract sufficiently that it magically popped from the cage, between my legs, rolled off the shoulder of the highway, and into the grasp of the nefarious personal-property-snatching weeds.”

And the thing is, because of the cooler temperatures this morning and the cloud cover I hadn’t even touched that second water bottle bolted to my seat tube. So it wouldn’t be a case of miss-insertion on my part.  Moreover, because of the traffic noise I would not have heard the container of refreshing liquid fall to the ground and roll away.  But really, the real truth of the matter is that I had been so focused on maintaining my speed and not getting hit by a semi, that water bottle could have exploded on my leg and I might not have noticed.

So what does that have to do with mortgages? Well, thanks for asking. Don’t rule out the possibility that the Fed has been so fixated on keeping the economy safe from inflationary pressures that they have failed to notice the downslide or absolute disappearance of other economic data that would make life in this first world country more tolerable when things really heat up (or in this case, really cool down). One of those “water bottles” is the labor market, which seems to be cooling in many parts of the country. I think that’s going to catch up with us as a nation sometime next year, and when it does, we will see inflation–and the rest of the economy–cool, which will lead to interest rates dropping by at least 1% in 2026.

Waller