Williams Points to International Progress on Inflation

Higher interest rates are working to bring down inflation in the U.S. and around the world, New York Federal Reserve President John Williams said Thursday, but it still ⛄may not be enough for the Federal Reserve to cut rates.

At an event held by the Economic Club of New York, Williams said price pressures inflamed by the pandemic, the war in Ukraine, and global supply chain issues were easing helped lower by higher interest rates.

“Monetary policy is clearly working the way we would like it to, not just here, but around the world,” Williams said. “We’ve actuall♑y seen strong similarities across countries, and we’re seeing inflation come down.”

Event moderator and CNBC host Sara Eisen asked if Williams would predict when the Federal Reserve would follow the lead of the European Central Bank, which is expected to make its first rate cut at its June meeting.

But Williams wouldn’t make any commitments to either when the Fed could cut rates or what levels of inf♛lation could trigger a rate move, saying central bankers need to continue to watch incoming ⛦data.

“We’re in a slightly different place rig🐓ht no🦄w,” Williams said. “At some point, interest rates in the U.S. will eventually need to come down, but the timing will be driven by how we do with achieving our goals.”

Like 澳洲幸运5开奖号码历史查询:other officials recently, Williams said if inflation were t💙o rise again, the Fed was ready to take action by raising rates, though he didn’t see it as the likely case.

“We proved 🍌we can and will do that,” Williams said. 

-Terry Lane

Mortgage Rates Rise for the First Time in Four Weeks, Freddie Mac Said

High mortgage rates are one major factor impacting people's desire to buy or sell a home and that calculus didn't get better this week.

The average rate for a 30-year mortgage rose to 7.03% this week, according to Freddie Mac. Raes have seesawed near 7% since April and this is the first time in four weeks that they've increased.

High interest rates have impacted new and existing home sales. Earlier today, pending home sales indicated that the trend may not stop any time soon. Economists have said if the Federal ꦓReserve cuts interest rates, buyers and sellers could come back to the market.

Read more about how the Federal Reserve's influential interest rate is stifling the housing market here.

Housing Market Outlook Dims As Pending Sales Fell 7.7% in April

An already slow housing market could grind down even further in the coming months if contract signings are any indication.

Pending home sales fell 7.7% in April, the National Association of Realtors (NAR) said Thursday, indicating that 澳洲幸运5开奖号码历史查询:already lackluster sales have more room to be dragged down by today’s high mortgage rates. An index measuring future home sales, based on contract signings, fell to its lowest level since April 2020.

The slowdown was the latest indicator of how high mortgage rates have hurt affordability enough to drive many buyers from the market and dampen sales. The average mortgage rate has been up and down at the outset of the year, with a notable upswing in April, but stayed in the 7% range, close to two-decade highs according to Freddie Mac.

"The impact of escalating int𒅌erest rates throughout April da๊mpened home buying, even with more inventory in the market," NAR Chief Economist Lawrence Yun said in a press release.

Mortgage rates are influenced by the fed funds rate, the U.S. central bank’s main tool of monetary policy. Fed officials have held the rate at its highest since 2001 since last summer in an effort to quell inflation, and are 澳洲幸运5开奖号码历史查询:looking for signs that the annual inflation rate is falling closer to the Fed’s 2% goal before they’ll consider cutting it—an event that financial markets are 澳洲幸运5𓃲开奖号码历史查询:betting will happen in November or December. 

If and when rate cuts come, they would be welcome news fღor buyers and sellers in a still-gridlocked housing market. 

"The Federal Reserve’s anticipated rate cut later this year should lead to better conditions, with improved affordability and more supply,” Yun said in a release.

International Trade Deficit Jumps in April

The international 澳洲幸运5开奖号码历史查询:trade deficit jumped by 7.7% in April, as retailers and wholesa❀lers built up their inventories, Census Bureau data showed.

Imports of goods into the U.S. exceeded exports by $99.4 billion, a jump of $7.1 billion from March, to press the trade deficit to its highest levels in nearly two years.

Matth🍎ew Martin, U.S. economist at Oxford Economics, said that higher imports were likely to drag down U.S. gross domestic product (GDP) in the second quarter.

“Lean inventory levels and continued resilience in consumer spending mean imports should remain well supported. Exports, meanwhile, will contend with weaker relative global demand and a strong do🦹llar,” Martin wrote.

Automobiles helped fuel the growth in the trade deficit, with imports increasing by 10%, while U.S. exports of food and beverages, along with industrial exports, mo❀ved lower. The U.S. did increase exports of consumer goods and automobiles.

-Terry Lane

US Economy Grew Slower Than Previously Thought in First Quarter

The U.S. economy is slowing down more than p🧜reviously thought.

The Gross Domestic Product (GDP) grew at an annual rate of 1.3% in the first quarter, the Bureau of Economic Analysis said Thursday. That was a slowdown from the 3.4% growth rate of the fourth quarter of 2023. It was also less than the 1.6% initially estimated last month, hitting the slowest growth♋ rate since early 2022.

"The economic data today are a double-edged sword," wrote Chris Zaccarelli, chief investment officer for Independent Advisor Alliance. "On the one hand, the slowing GDP and slowing personal consumption are a sign that the economic expansion is cooling, which could be a concern for companies and stock market investors. But on the other hand, slowing consumption and economic growth could be just the news we need to see in order for the rate of inflation to keep coming down and allow the Fed to reduce interest rates after all."

The estimate was downwardly revised after new data came in showing consumer spending—the backbone of the economy accounting for most of the GDP—澳洲幸运5开奖号码历史查询:has been decelerating. 

Forecasters had expected an even sharper slowdown, to a rate of 1.2% according to a survey of economists by Dow Jones Newswires and the Wall Street Journal. 

Consumer spending has been one of the economy’s bright spots for years but has rec🍨ently shown signs of weak🍰ness as elevated inflation and the Fed’s high interest rates meant to combat it both drag on household budgets. 

Initial Jobless Claims Remain Historically Low

Another 3,000 people filed for unemployment insurance in the week ending May 5, slig𓃲htly more than ecಞonomists expected.

Economists surveyed by the Wall Street Journal and Dow Jones newswires expected 218,000 jobless claims, but the weekly measure came in at 219,000. The weekly measure can be volatile and is often revised after the initial release. That number is still historically low.

"Initial jobless claims remain well below the level at which nonfarm payroll employment would be at risk of backsliding," wrote Bernard Yaros, Oxford Economics' lead U.S. economist. "Job losers are more likely to file for unemployment benefits if they anticipate an extended period of joblessness, but that is not the case today, with the 澳洲幸运5开奖号码历史查询:job-finding rate for unemplo💯yed workers higher for the most part compared to past cycles."

The less volatile four-week moving avera💮ge𒁃 was 222,500, an increase of 2,500 from the previous week.

Mortgage Payments Up $55 in April as Homebuyer Affordability Slips

Homebuyer affordability conditio🐠ns declined in April, with the median mortgag🍷e payment jumping $55 from March’s levels, according to data from the Mortgage Bankers Association. 

The national median mortgage payment increased to $2,256 in April, an increase of 2.5% from🐼 last month.  Compared to last year,🌞 the national median payment was higher by $144, or 6.8%.

澳洲幸运5开奖号码历史查询:Mortgage rates above 7% kept many potential homebuyers 𝓰on the sidelines, also making affordability more difficult, said Edward Seiler, MBA associate vice presi🍨dent.

“In addition to lower mortgage rates, more housing inventory is desperately need🐻ed in markets throughout the country this summer to alleviate these tough affordability conditions,” Seiler said.

-Terry Lane