Home sellers in pandemic boomtowns are slashing prices as they adapt their expectations to a rapidly cooling market. People who could suddenly work from anywhere during the pandemic flooded once-quiet housing markets like Boise, Phoenix and Tampa in search of more space and lower housing costs. This demand sent home values soaring. Now, the Federal Reserve’s efforts to tamp down inflation have sent mortgage rates above 5% and pulled the brakes on the housing market. Nationwide, home sales dropped 19% year-over-year in July to the lowest level since the early days of the pandemic. Meanwhile, a jump in apartment construction in the US may help provide some relief — eventually — to renters who’ve faced soaring prices. The construction boom was driven by demand, particularly in Southern cities like Dallas and Miami where many Americans flocked during the pandemic. But other places that were deserted during the worst of the Covid-19 crisis, including New York City, have seen an influx of returns. It’s peak rental season in New York—and in the hottest market in decades, apartment hunters are fed up, frustrated and over budget.  —Natasha Solo-Lyons

Bloomberg is tracking the coronavirus pandemic and the progress of global vaccination efforts.

The era of low inflation is gone for good, according to Pimco and Capital Group. Some of the world’s biggest bond investors say the market is wrong to expect central banks to score a long-term win in the war against inflation.

A sobering tone took over Wall Street after a rally that added $7 trillion to the stock market, with traders bracing for hawkish rhetoric from Federal Reserve officials at the Jackson Hole retreat later this week. Equities saw their worst rout in two months, following a surge that drove the S&P 500 to its best start to a third quarter since 1932. The Nasdaq 100 underperformed as Treasury 10-year yields topped 3%. Here’s your markets wrap.

Traders on the floor of the New York Stock Exchange. Photographer: Michael Nagle/Bloomberg

The judge who approved the search of former President Donald Trump’s Florida estate said “intense public and historical interest” in the FBI affidavit backing the warrant justified making an effort to unseal portions of it. US Magistrate Judge Bruce Reinhart in West Palm Beach, Florida, issued a written order Monday affirming his finding from a hearing last week that the Justice Department hadn’t made its case to keep the FBI’s search-warrant affidavit completely sealed.

Former Treasury Secretary Lawrence Summers called on the Federal Reserve to deliver a clear message, saying it will need to impose “restrictive” monetary policy that drives up the US unemployment rate in order to quell inflation.

Lawrence Summers. Photographer: Simon Dawson/Bloomberg

New York City renters are broadening their searches to cheaper locales during the apartment market’s peak season. Neighborhoods in south and east Brooklyn as well as central Queens saw spikes in online searches last month, according to StreetEasy. Meanwhile, search volume declined in traditionally popular areas like Manhattan’s West Village, East Village, Greenwich Village, Lower East Side and SoHo. 

The euro broke below parity for the second time in just over a month as a resurgent dollar and the prospect of a difficult winter for the region begin to bite. Strategists see the dip as the start of a deeper descent.

Saudi Arabian Energy Minister Prince Abdulaziz bin Salman said “extreme” volatility and lack of liquidity mean the oil futures market is increasingly disconnected from fundamentals and OPEC+ may be forced to cut production.

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Price cuts in the Hamptons would have been unimaginable just a few months ago. Home values in the luxury Long Island enclave rose to record highs during the pandemic as wealthy New Yorkers sought an escape from the city, with median prices surging 88% between the second quarter of 2019 and the same period of this year. But the Hamptons market is entering a new phase as a bumpy stock market, early signs of a housing slowdown and fears of a recession cause demand to subside. It doesn’t help that mortgage rates have moved higher at a time when inflation is making everything more expensive.

Homes in Southampton, New York. Photographer: Johnny Milano/Bloomberg

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Bloomberg Technology Summit: The global economy is being redesigned amid surging inflation, the Covid-19 pandemic, Russia’s war on Ukraine and the current bear market. Join Bloomberg Live in London and virtually on Sept. 28 to hear Europe’s business leaders, policymakers, entrepreneurs and investors explain how they’re adapting to this environment and discuss strategies to create business models that foster growth and innovation. Register here.