Federal Reserve's Bowman Still Sees Case for Interest Rate Hikes If Inflation Persists

Federal Reserve Governor Michelle Bowman once again reiterated her openness to raising interest rates Friday, saying there are still risks that i🌺nflation could rise.

“While the current stance of monetary policy appears to be at a restrictive level, I remain willing to raise the target range for the federal funds rate at a future meeting should the incoming data indicate that progress on inflation has stalled or reversed,” Bowman said at a Pennsylvania bankers’ convention.

澳洲幸运5官方开奖结果体彩网:Like other Fed officials, Bowman said the central bank needs more data showing a decline in 澳洲幸运5官方开奖结果体彩网:inflation before it can move to change interest rates from their 澳洲幸运5官方开奖结果体彩网:current 23-year high. 

Recently, the Consumer Price Index (CPI) inflation gauge 澳洲幸运5官方开奖结果体彩网:came in softer than expected and 澳洲幸运5官方开奖结果体彩网:U.S. retail sales data showed cons😼umers may be reaching their spending limit. 

However, Bowman said progress on inflation may still be slowing after price pressures eased subst🦹antially in the second half of last year. 

-Terry Lane

How the Housing Shortage Could Impact the U.S. Budget

Add the federal budget to the long list of the aspects of American life affected by the chronic housing shortage.

Members of the House Armed Service Committee are reportedly planning to ask for an extra $1.2 billion during the budget process to help servicemembers pay for housing, according to a report from Roll Call.

Military families and their civilian counterparts have faced soaring co💃sts for shelter in the last few ye꧑ars.

Potential home buyers have been hit by 澳洲幸运5官方开奖结果体彩网:surging prices caused by a low number of homes for sale and mortgage rates that are at or near their highest in decades. These factors have pushed monthly mortgage payments on median-priced homes well out of reach for all but high-earni🀅ng buyers. 

Those who lease their home have faced similar issues, with rents increasing 23% since the onset of the pandemic, according to the Consumer Price Index.

Marilyn Strickland, a Democratic congresswoman from Washington, whose district inclಞudes about 50,000 military personnel and civilians at the Joint Base Lewis-McChord near Tacoma, told Roll Call that “access to affordable housing remains the top issue for servicemembers.”

The military housing allowance is given to servicemembers to pay for civilian housing if they aren’t quartered on a military base.

While $1.2 billion is a drop in the bucket of the $825 billion defense budget, the request highlights how the high costs of housing have impacted every corner of the economy.

‘Out of Sync’ Leading Economic Index Falls Again

The U.S. Leading Economic Index (LEI) steepened its decline in April, dropping 0.6% compared with the previous month, another data point showing the economy may be slowing down.

“Another decline in the U.S. LEI confirms that softer eღc✱onomic conditions lay ahead,” said Justyna Zabinska-La Monica, senior manager of business cycle indicators at the Conference Board, which issues the monthly report. “Deterioration in consumers’ outlook on business conditions, weaker new orders, a negative yield spread, and a drop in new building permits fueled April’s decline.”

The April drop was the largest since October and comes after a 澳洲幸运5官方开奖结果体彩网:more modest 0.3% dip in March.

The index is near its pandemic lows, despite strong economic growth in the months since shelter-in-place orders were lifted. Wells Fargo economists Tim Quinlan and Nicole Cervi noted the composite index of economic measurements was “out of sync” with the economy, as weak consumer expectations were helping to pull the index down.

“The challenging mix of stubborn inflation and high interest rates have weighed🐻 on the psyche of American consumers and businesses alike,” the Wells Fargo economists wrote. “Positive real disposable income growth and elevated corporate profit margins have supported solid economic activity, yet the additional planning and geꦉneral uncertainty involved in getting things done has dragged on sentiment.”

-Terry Lane