Russians push back on Putin

NIALA: Good morning! Welcome to Axios Today!

It’s Thursday, September 22nd.

I’m Niala Boodhoo.

Here’s what we’re following: what the Fed’s latest rate hike means for the housing market. Plus, what’s motivating YOU to vote or stay home this November.

But first, Russians push back on Putin’s call for reservists to fight. That’s today’s One Big Thing.

JOE BIDEN: This war is about extinguishing Ukraine's right to exist as a state, plain and simple. And Ukraine's right to exist as a people.

NIALA: That's president Biden at the United Nations General Assembly yesterday, hours after Russian president Vladimir Putin announced a partial mobilization of Russian reservists for the war in Ukraine. Putin said he'll order up to 300,000 additional troops in Russia's first military mobilization since World War two. Jailed opposition leader, Alexei Navalny called for mass protests and hundreds did protests in at least 38 cities across Russia. As of last night, at least 1,300 people had been detained. Here to catch us up quick on all of this is Axios World Editor, Dave Lawler. Hi Dave.

DAVE LAWLER: Hi Niala.

NIALA: Dave. So to be clear, this isn't a draft, is it? And what justification did Putin provide for saying he needed more troops?

DAVE: This is not a draft. This for now, is basically calling up reservists, importantly, one aspect of this. There are a lot of troops who went to Ukraine on short term contract, those contracts can now be extended. So troops, know, that thought they were spending a short tour in Ukraine maybe there quite a bit longer. This is, you know, also kind of a long term play because these troops need to be trained and equipped some of them, you know, so it's not like it's immediately gonna change the battlefield outlook. But obviously the backdrop to this is that the war is not going very well for Russia.

So that was sort of the, between the lines of Putin's comments. This is the first step down a road of moving beyond this pretext that this is just a limited, special military operation in the east of Ukraine. And basically, you know, admitting by Putin, he needs help to have more success on the battlefield.

NIALA: Putin yesterday also hinted he could turn to nuclear weapons to which he added this isn't a bluff. How did Western countries respond to that yesterday?

DAVE: Unilateral condemnation. There's a lot of concern and a part of the reason for that is that Putin did two things. He said he's gonna partially mobilize his forces. He also said that Russia is going to move toward referendums in these parts of Ukraine that are now controlled by Russia. So he could basically declare those as part of Russia and that changes the equation for nuclear weapons, right? Because he can say these attacks are happening on Russian soil. These Ukrainian offensives are taking place on our land. And so, under Russian military doctrine that could put a nuclear strike in play. Basically, western leaders think Putin's bluffing for now, but it's not a bluff that you necessarily feel comfortable calling on a leader that's quite unpredictable.

NIALA: The protest against mobilization actually violate Russian law, given that how big of a deal is it to see how many people turned out yesterday?

DAVE: Quite significant. We were also looking at flights, sold out of Russia.There were long lines to get across the border from Russia, into neighboring Georgia, overnight. People you know, right now they're not necessarily going to be enlisted into the military, but you know, there's obviously some concern from ordinary Russians that that's where this is heading. And when it's potentially your son, your husband, who's going to go off to war. That brings things home to ordinary Russians, potentially in a way that this war had not up to now. And so it will be really interesting to watch over the next few days, whether these protests grow, and how the Kremlin responds.

NIALA: Dave Lawler is Axios’ World Editor. Thanks Dave.

DAVE: Thanks Niala.

NIALA: In a moment, the housing market and Fed’s interest rate hike.

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What the Fed’s latest rate hike means for the housing market

NIALA: Welcome Axios today. I'm Niala Boodhoo.

The federal reserve raised interest rates by 0.75 percentage points on Wednesday. And the big hike is the Fed's third straight to help fight inflation. And all of this is leaving a mark on the housing market, driving mortgage rates above 6%. In August, data out yesterday, shows that existing home sales fell for the seventh straight month, that's according to the National Association of Realtors.

Axios' Markets Correspondent Emily Peck has been covering the housing market. Emily, I just provided a lot of data there. What does all of this mean for someone who's looking to buy a house right now?

EMILY PECK: It's good news, bad news I guess. The bad news is mortgage rates are now, as you said, above 6%. Data just this week said the 30 year mortgage rate was 6.25%, that's like more than double what it was during the heydays of the pandemic housing boom. When everyone raced to either buy a house or refinance their mortgage for the lower rate. So mortgage rates are high, that adds hundreds of dollars to your monthly mortgage bill. If you decide to buy a new house with a mortgage at this higher rate. I guess we could spin it Niala that the good news would be this is causing home prices to decline or moderate a little bit and the days of, you know, bidding wars, where it was hard to even buy a house are behind us in most places.

NIALA: And Fed Chairman Jerome Powell talked about this yesterday. He actually talked about supply and demand. Let's hear how he addressed this.

JEROME POWELL: What we need is supply and demand to get better aligned. So that housing prices go up at a reasonable level. At a reasonable pace and that people can afford houses again. And I think we, so we probably in the housing market have to go through a correction to get back to that place.

NIALA: We've had a red hot housing market, what does a correction look like?

EMILY: Correction is such a, it's such jargon to disguise pain so many times, but a correction would mean, you know, home prices fall, you know, it could mean the value of your home falls a little bit too. A lot of people get scared when they hear home prices falling and corrections in the real estate market cause people do recall the financial crisis back in the day, 2008, when home prices plummeted and foreclosures skyrocketed, and it was kind of a big ugly mess. And I don't think that's what we're talking about here.

NIALA: You have been reporting though that we've seen significant layoffs happening across the real estate industry. What has that looked like?

EMILY: The labor market as a whole, as we've talked about on this podcast before, is really good. Unemployment is low, all that is fine. But in the mortgage sector there has been some carnage. There's been a lot of layoffs, various companies have gone out of business that were in the mortgage business. I spoke to one woman who was laid off from her job at mortgage provider, Better.com, in March and then interviewed at eight other mortgage companies each one subsequently announced layoffs of their own.

NIALA: So if the housing market, the sales of it cool off, does that mean rents which we know have been skyrocketing also start to slow down?

EMILY: Not necessarily, isn't that wild, people who decide not to buy a house because mortgage rates are so high, what are they gonna do? They're gonna rent. So that's gonna push up demand for rentals. A source I was speaking to yesterday basically said the only way rents are gonna come down is if there's like, essentially a recession and no one really wants that.

NIALA: Axios’ Markets Correspondent Emily Peck. Thanks Emily!

EMILY: Thank you.

What’s motivating you to vote or stay home in November

NIALA: As we get closer to the midterms, we’ve been hearing from many of you about what’s driving you to vote this November, or to sit this election out.

Here’s some of what you’ve told us.

ABBY: Hi, Nyla. I'm Abby and I'm from Fort Worth, Texas. This November, I am most concerned about gun reform laws, the way the border and immigration is handled and improving our power grid.

DAVID: Hello. My name is David Holicz and I am from Highland, Indiana. And I don't wanna vote this November because I feel like things just will not change. Think, for example, the Paris agreement, Obama administration we were in, Donald Trump we were out, Biden were in. And I don't believe that my single vote will impact this vicious cycle.

Kellie: My name is Kellie calling from the Central Valley in California. What's motivating me to come out to the polls and indeed to invite others to join me is I feel like our pluralist society is under threat. I feel like our rights are being taken away from us. So, I am inviting others to join me at the polls and to save our democracy.

NIALA: Thanks as always for sharing, and we’ll keep playing your thoughts, so send them our way: you can record a voice memo with the issues most important to you in these midterms, and text it to me at (202) 918-4893.

That’s it for us today! I’m Niala Boodhoo - thanks for listening - stay safe and we’ll see you back here tomorrow morning.

NIALA: Confused by crypto? Can’t keep up with the Metaverse? The Slate Money podcast is here for you. Every week, familiar voices including Felix Salmon, Emily Peck, and Elizabeth Spiers break down the latest in business and finance news. Listen to Slate Money every Saturday morning wherever you get your podcasts.