Another Fed Official Raises Doubts About Whether Rates Will Be Cut This Year

In an online discussion with the Pensions & Investments news publication, Minneapolis Fed President Neel Kaskkari raised questions over whether the Federal Reserve would be able to cut interest rates 💎du🎀e to inflation remaining stubbornly resilient.

While he thought in March that the Fed would cut rates two t💯imes this year, it is possible that the central bank wouldn’t cut rates at all in 2024, he said.

“If we continue seeing moving sideways, then that would make me question if we need to do those rate cuts at all. There is a lot of momentum in the eco💛nomy right now,” he said.

Kashkari also said that rate hikes weren’t “off the table,” but weren’t likely, while the 2% annual inflation🥃 target was something that couldn’t be changed.

Kashkari joins his colleagues Atlanta Fed President Raphael Bostic a🌱nd Fed Governor Christopher Waller who have both expressed doubt ꦫabout the rate cut timeline for this year.

澳洲幸运5官方开奖结果体彩网: -Terry Lane

This blog post has been updated to reflect Kaskari's correct title.

Fed Officials See Need for More Progress on Housing Inflation

Housing costs pose the biggest threat to getting inflation down to the Federal Reserve’s target rate, Chicago Fed President Austan Goolsbee told a meeting of chambers of commerce Thursday. 

Noting that recent inflation reports were likely a “bump” in the downward path of inflation, Goolsbee said they didn’t show “overheating” demand that would worry Fed officials. However, Goolsbee said unless more improvement was made in housing prices, inflation may not fall all the way to the 澳洲幸运5官方开奖结果体彩网:2% target.

“Housing inflation remains my most ๊valuable indicator for the immediate future,” Goolsbee said. “Although it has come down some from quite elevated levels, it continues to run much higher than it was before the pandemic.𒈔 Based on market data on rents for new leases, I have been expecting it to come down more quickly than it has.”

In an online interview with the Global Interdependence Center, Cleveland Fed President Loretta Mester largely reiterated 澳洲幸运5官方开奖结果体彩网:co✱mments she made earlier this week. Mester said while she still needed more data that inflation was moving toward 2%, she did believe that the Federal Reserve would be able to start lowering rates sometime this year. 

-Terry Lane

Fed Should Take Its Time When Considering Rate Cuts, Barkin Says

Giving no assurances on the timing of interest rate cuts, Richm🌳ond Federal Reserve Bank President Thꩲomas Barkin said officials should continue to monitor economic data before moving to cut rates.

“I think it is smart fo🐭r the Fed to take our time,” Barkin said in remarks delivered to the Home Building Association of Richmond. “No one wants inflation to reemerge. And given a strong labor market, we have time for the clouds to clear before beginning the process of toggling rates down.”

Barkin said the Fed would have to gain “澳洲幸运5官方开奖结果体彩网:greater confidence” that inflation is moving toward the annual target rate of 2%. While price increases have cooled off substantially since their 2022 peak, 澳洲幸运5官方开奖结果体彩网:recent reports have indicated inflation could be stalling before reach🌱ing the target. 

There are still risks inflation could go ba🐼ck up, Barkin said, noting prices remained high in several categories with housing and services costs still above historical levels.

“While I do hea꧒r price-sette𝓰rs increasingly convinced that the era of significant pricing power is behind them, the inflationary experience of the last two years has surely given them more courage to use price as a lever,” Barkin said. 

-Terry Lane

Mortgage Interest Rates Continue Hovering Near 7%

If you’re in the market for a mortgage, the rates you’re being offered likely haven’t changed much in the last week, for better or worse.

The average rate lenders offered for a 30-year mortgage rose to 6.82% this week from 6.79% the week before, mortgage giant Freddie Mac said. Rates have been stuck in a holding pattern in the high 6% range since the year began, after slid൲ing down from 7.79% in late October. 

While rates remain lower than their recent peak—which had been the highest since 2000—homebuyers have seen little relief on affordability. High mortgage rates and rising home prices have combined to put purchasing a new house out of reach for many first-time buyers, a trend that’s unlikely to change unless rates fall.

Mortgage rates are heavily influenced by the Federal Reserve’s fed funds rate, which the central bank is holding at a 23-year high to combat inflation. And although policymakers say they expect to cut rates at some point this year, the timeline for those cuts—and any potential relief to mortgage rates that might bring—澳洲幸运5官方开奖结果体彩网:remains uncertain.

Tomorrow's Job Gains Could Derail June Rate Cut Expectations

The labor market’s winning streak likely continued in March, with employers steadily adding jobs to an already healthy economy, if forไecasts are correct.

When the 澳洲幸运5官方开奖结果体彩网:Bureau of Labor Statistics releases its widely watched report on employment Friday, it’s expected to show the economy gained 200,000 jobs, according to a survey of economists by Dow Jones Newswires and The Wall Street Journal. That would be down from 275,000 in February, but solid by historical standards—thꦕe average in the five years lead𝄹ing up to the pandemic was 191,000.1

The economy has gained jobs every month since December 2020, with March likely marking the 39th straight month of📖 job gains.

Should those projections hold, it would be further evidence of the economy’s resilience under the weight of the 澳洲幸运5官方开奖结果体彩网:Federal Reserv✨e’s high interest rates, ⭕which have kept borrowing costs on all kin♚ds of loans at their highest in decades to restrain inflation. 

“Instead of downshifting, the U.S. labor market seems to be gearing up again,” Sal Guatieri, senior🎐 economist at BMO Capital Markets, wrote in a commentary.

That could derail expectations of a June rate cut—Fed officials have worried that♕ rapid wage growth could keep inflation above the Fed’s target of a 2% annual rate. On the other hand, an unexpectedly weak hiring market could push the Fed to cut rates faster and sooner to help stimulate business and stave off a recession. 

Read more about what to expect from the jobs report here.

U.S. Trade Deficit Widens in February Despite Growth in Oil, Plane Exports

The U.S. trade deficit ticked higher in February, wit🐷h both exports and imports moving higher as U.S. oil shipments continued to grow. 

The U.S. Bureau of Economic Analysis (BEA) reported a 澳洲幸运5官方开奖结果体彩网:trade deficit of $68.9 billion, up almost  2% from the prior month. Imports were $331.9 billion, sur🐭passing $263.0 b൩illion in exports. 

The largest 澳洲幸运5官方开奖结果体彩网:trade deficit was with China, followed by the Europeꦑan Union and Mexic🍃o. The report showed the U.S. had a trade surplus with South and Central America. 

U.S. crude oil shipments continued to grow in February, witౠh 2024 totals coming in stronger than production levels last year. Civilian aircraft exports also grew in February to push 2024 levels higher this year. 

But Oxford Economics Matthew Martin said supply chain strength coꦫuld push imports higher in 2024, potentially widening the U.S. trade gap with other nations.

“The continued strength of the U.S. dollar and s𒀰ofter global demand, on balance, will weigh on exports,” he wrote. 

-Terry Lane

Federal Reserve Officials Unsure of Path Forward Amid Surprising Economic Strength

The latest rounds of data on inflation and the economy have left policymakers at the Federal Reserve in limbo about when, and how much, they should cut interest rates.

In recent speeches, Fed officials were divided on how to interpret recent reports showing an economy potentially resisting the impacts of sustained high interest rates. Inflation is staying 澳洲幸运5官方开奖结果体彩网:stubbornly above 🌟the central ꦑbank’s goal of a 2% annual rate, while the job market chugs along at a healthy clip, and 澳洲幸运5官方开奖结果体彩网:consumers keep spending like there’s no tomorrow.

Fed officials face the decision of when to cut the central bank’s influential fed funds rate from its current range of 5.25% to 5.50%, where it’s been since July. And they're seemingly split on what to do next.

Fed Chair Jerome Powell, has articulated a “wait and see”🦄 approach to determine whether the latest uptick in inflation was just a fluke🌠 or a genuine setback, which he reiterated in comments Wednesday.

Some officials, such as San Francisco Fed President Mary Daly and Federal Reserve Governor Adriana Kugler have followed Powell's lead this week in public comments. But not all Fed officials are thinking the same way.

Yesterday, Atlanta Fed President Raphael Bostic said only one rate cut late in the year was likely and his colleague Fed Governor Christopher Waller has also indica💜ted he has pulled back on predictions for when to cut rat𒈔es.

“Differences in opinion are increasing at the Fed, even beyond Powell and Waller, who are considered the ꦯtwo most imp😼ortant voices on the FOMC,” Aditya Bhave and Michael Gapen, economists at Bank of America Securities, wrote in a commentary Wednesday ahead of Powell’s speech. “Policymakers appear to differ on how to balance the dual mandate: Should the Fed accept a longer path back to 2% inflation in order to ensure a soft landing?”

Read more about how recent data has impacted Federal Reserve officials' outlook here.

Claims for Unemployment Insurance Jumped Last Week

The number of people who put in an initi✤🐠al claim for unemployment benefits soared past expectations last week, but remain at historically low levels.

Initial claims jumped to 221,000 in the week ended March 30, about 9,000 than the week prior, according to data from the Department of Labor. That's 8,000 more than economists polled by the Dow Jones Newswires and Wall Street Journal predicted on average.

Theꦐ jump is no cause for concern, economists said.

"Initial jobless claims rose to the highest level since late January in the week ended March 30, but remain comfortably below a level that would signal a significant weakening in labor market conditions," wrote Nancy Vanden Houten, lead U.S. economist at Oxford Economics. "The claims data and other labor market indicators are consistent with a job market that is still quite healthy."