Fed Meeting Minutes Show Discussions of Sticky Inflation

Released three weeks after the meeting, today's Federal Open Markets Committee minutes provided more details about how officials are looking at the economy, inflation and interest rates.

While members of the committee aren’t likely to move off a decades-high fed funds rate soon, the minౠutes showed🅺 officials still had questions about where prices were going.

“Higher for longer is the official mantra as the Fed officially acknowledged that inflation is staying more sticky than they would have liked. And although they wanted to cut rates, th🌃ey are not going to be able to do that in the near future,” wrote Chris Zaccarelli, chief investment officer for Independent Advisor Alliance, in an analysis of the minutes.

The minutes noted some members thought the increases in inflation seen 🌌so far this year could be attributed to weather and items with volatile prices, such as gas and some food products. 

“However, some participants emphasized that the recent increases in inflation had been relatively broad-based and therefore should not be overly discounted,” t🌸he minutes noted.

-Terry Lane

Fed Officials See Uncertainty, Risks Ahead of Incoming Data

Managing risks and adjusting for uncertainty will be crucial in the Federal Reserve’s battle to get inflation down to its annual 2% target, officials said at an event on Tuesday evening. 

Cleveland Federal Reserve Bank President Loretta Mester said she needed to see several more months of better inflation data before endorsing an interest rate cut from its current level, noting that the 澳洲幸运5开奖号码历史查询:reports from the first quarter were disappointing.

“It’s a little too soon to determine where inflation is going𒈔,” said Mester, who added 🐽she believes price pressures will cool, only it will “ take longer than I thought it would.”

Mester joined her Boston and Atlanta counterparts at the event Tuesday evening. The trio spoke just after the government reported 澳洲幸运5开奖号码历史查询:inflation took a step back for the first time this year in April.

Boston Federal Reserve Bank President Susan Collins said economic uncertainty ma💦de it difficult for officials to chart a course forღ future interest rate changes.

Officials sh🧔ould “not overreact t🌞o any one set of readings,” Collins said. “This is a moment where patience really matters.”

Atlanta Federal Reserv🃏e Bank President Raphael♌ Bostic said he was pleased inflation has come down as far as it has, given the strength of the economy. That strength gave the Federal Reserve time to evaluate the data to balance the risks between 澳洲幸运5开奖号码历史查询:rising unemployment and increasing price pressures. 

ꦫ “It’s going to be risk management and ✨that we keep monetary policy well-positioned going forward,” Mester said. 

-Terry Lane

Home Sales Declined Again in April and Remain Historically Low

The market for existing homes was stuck in neutral in April, with fewer sales and soaring prices as high mortgage rates continued to stifle homebuying.

If homes sold at the rate they did in April, 4.14 million would be sold all year, a 1.9% decline from the rate in March, the National Association of Realtors said Wednesday. Despite slow sales, prices continued climbing: the median-priced home sold for $407,600, the highe༺st ever for 🌜any April, and a 5.7% increase from last year.

♊To put April’s sales in ෴perspective, the rate was 17% below the long-run average of 4.96 million, and 26% below the level in March 2022 when the Federal Reserve began its campaign of anti-inflation interest rate hikes, Jay Hawkins, an economist at BMO Capital Markets, said in a commentary.  

Mortgage Demand Moves Up Again as Rates Hit 7-Week Low

🦩 Home borrowing costs declined for the third straight week, sending demand for mortgage loans higher, according to data from the Mortgage Brokers Association. 

Average rates for 30-year mortgages dropped to 7.01% for the week ending May 17, the lowest levels in almost two months, prompting a 1.9% increase in mortgage applications. With lower 澳洲幸运5开奖号码历史查询:mortgage rates available, more borrowers chose refinancing options, which increased 7% from 澳洲幸运5开奖号码历史查询:last week, with refinancing options from the Department of Veterans Affairs (VA) helpღing drive the increase. 

“Rates coming down from recent highs spurred some borrowers to act, with increases across both conventional and🧔 🐷government refinance applications,” said Joel Kan, MBA vice president and deputy chief economist. 

However, a 澳洲幸运5开奖号码历史查询:lack of for-sale houses is keeping purchase activity low, which declined 🐭this week despite thꦍe lower rates, Kan said. 

-Terry Lane