Fed’s Collins Says Inflation Fight Will Take ‘Longer Than We Thought’

High interest rates are showing signs of working to bring down price pressures, but the data still isn’t painting a clear enough picture yet for the Federal Reserve to make a chaꦕnge to interest rates, said Boston Federal Reserve Pres🌌ident Susan M. Collins Wednesday.

“I do remain optimistic that this can be accomplished in a reasonable amount of time, and with a labor market th༺at remains healthy, b🎐ut there is a significant amount of uncertainty around that outlook,” Collins told a Massachusetts Institute of Technology audience. “It’s just going to take longer than we thought.”

Interest rates, which are at a 23-year high, are “moderately restrictive,” but high enough to eventually cool rapidly increasing inflation. Collins also said it could take more time for interest rates to work, noting the effects of past rate hikes are usually seen within four to six fiscal quarters. The Fed has held interest rates at the current 5.25% to 5.5% for about three ๊fiscal quarters.

“It’s too soon to tell how restrictive we’re being,”♕ said Collins, whose remarks mirrored other recent Fed speakers who have predicted that interest rates would need to stay at their current levels for longer than originall🌳y expected. 

Also today, Federal Reserve Gov. Lisa D. Coo😼k spoke on fiscal stability, with her comments largely avoiding the subject of monetary policy.

While Cook laid o🌠ut some risks to U.S. fiscal stability, most were largely manageable, she said.

The deposit flow issues t🤪hat 𒈔collapsed Silicon Valley Bank and other institutions last year had largely been resolved, with banks relying less on uninsured deposits.

And while commercial real estate risks existed for small- and medium-sized banks, as well as insurance companies, Cook said those risks were “sizable but manageable.” 

Additionally, Cool said while housing values are growing rapidly, there isn’t the 🌳same underlying ๊weakness that helped set off the 2006 housing market collapse.

“The house-price growth we have seen over the past few years has not been accompanied by increased lending or weaker credit standards, as was th🌞e case in the early 2000s. The household sector also is much more resilient than in 2006,” Co♕ok said. 

Wholesale Inventories Down in March as February Data Also Lowered

Wholesale inventories declined in Mꦕarch but𝕴 were not any worse than economists expected.

Wholesale merchants carried $894.7 billion in inventory at the end of March, 0.4% less than 澳洲幸运5官方开奖结果体彩网:February’s totals. February's numbers were revised to reflect a 0.2% increase, instead of the 0.5% that the Census Bureau originally reported. Economists surveyed by the Wall Street Journal and Dow Jones Newswire projected the 0.4🎉% decline. 

The report showed the inventories-to-sales ratio for wholesales was 1.35, a slighඣt increase when compared with the previous month, showing that products moved a bit more slowly in March. The inventories-to-sales ratio came in lower than the year-ago level. 

-Terry Lane

Mortgage Applications Increase on First Decline in Rates in Three Weeks

The first drop in borrowing costs in three weeks helped spur demand for home loans last week, as mortgage application volume inc꧃reased 2.6%, according to data from the Mortgage Banker𝕴s Association (MBA). 

The average 30-year, fixed-rate mortgage dropped to 7.18% in the week ending on May 3, the MBA data showe🐈d. 

“Treasury rates and 澳洲幸运5官方开奖结果体彩网:mortgage rates fell last week on the news of a slowing job market, with wage growth at the slowest pace since 2021,” said Mike Fratantoni, MBA senior vice president and chief economis♚t.&nb🅺sp;

Applications for 澳洲幸运5官方开奖结果体彩网:Federal Housing 🌸Administration (F🐼HA) loans were up by 5%, which helped push purchase activity up by 2% on the week. FHA-backed 30-year, fixed-rate mortgages fel𒅌l to 6.92%, also moving lower for the first time༺ in three weeks. 

"First-time homebuyers account for roughly half of purchase loans, and the government lending programs are an important source of financing for these homebuyers,” Fratantoni said.

More homeowners also applied to 澳洲幸运5官方开奖结果体彩网:refinance their loans, incre൩asing by 5%, the MBA data sho💃wed. 

-Terry Lane