Fed's Collins says fighting inflation will take “longer than expected”
7 hours 47 minutes ago
Boston Fed President Susan M. Collins said Wednesday that while there are signs that high interest rates are working to reduce price pressure, the data are not yet clear enough for the Fed to change rates. He said he did not describe the situation.
“While we are optimistic that this can be achieved within a reasonable period of time if a healthy labor market remains, there is considerable uncertainty in the outlook,” Collins told an audience at the Massachusetts Institute of Technology. There is,” he said. “It looks like it's going to take longer than I thought.”
Interest rates are at a 23-year high, “moderately restrictive” but high enough to eventually tame rapidly rising inflation. Collins also noted that the effects of past rate hikes have typically been felt within four to six fiscal quarters, and that it could take longer for rates to take effect. The Fed has kept interest rates at their current 5.25% to 5.5% for about three fiscal quarters.
“It's too early to tell how restrictive we will be,” Collins said, predicting that interest rates will need to remain at current levels for longer than initially expected. Echoing other recent Fed speakers.
Also today, Federal Reserve President Lisa D. Cook spoke about fiscal stability, but her comments largely avoided the subject of monetary policy.
Cook cited several risks to U.S. financial stability, most of which he said are manageable.
The deposit flow problems that brought down financial institutions like Silicon Valley Bank last year have largely been resolved, leaving banks less reliant on uninsured deposits.
Cook also said commercial real estate risks exist not only for insurance companies but also for small and medium-sized banks, but those risks are “significant but manageable.”
Kuhl also said that while home values are rising rapidly, there are no fundamental weaknesses like the one that triggered the 2006 housing market collapse.
“The rise in house prices we have seen over the past few years has not been accompanied by an increase in lending or a decline in credit standards like in the early 2000s. The household sector is also much more resilient than it was in 2006.” Cook said.
Wholesale inventory in March decreased as February data also declined.
13 hours 25 minutes ago
Wholesale inventories fell in March, but not as badly as economists expected.
Wholesalers' inventory at the end of March was $894.7 billion, down 0.4% from February's total. The February numbers were revised to reflect a 0.2% increase, rather than the 0.5% increase the Census Bureau had originally reported. economist survey wall street journal Dow Jones forecast a 0.4% decline.
According to the report, the sales-to-inventory ratio of the wholesale industry was 1.35 times, slightly higher than the previous month, indicating that the movement of goods was slightly slower in March. The inventory to sales ratio was lower than the same period last year.
-Terry Lane
Mortgage applications increase as interest rates drop for the first time in three weeks
15 hours 56 minutes ago
Mortgage applications rose 2.6% last week as borrowing costs fell for the first time in three weeks, stimulating demand for mortgages, according to data from the Mortgage Bankers Association (MBA).
The average interest rate on a 30-year fixed-rate mortgage fell to 7.18% in the week ending May 3, according to MBA data.
MBA Senior Vice President and Chief Economist Mike Fratantoni said: “Treasury and mortgage rates fell last week on news of a slowing job market, pushing wage growth to its slowest pace since 2021.” Stated.
Federal Housing Administration (FHA) loan applications rose 5%, which helped push purchase activity up 2% this week. FHA-insured 30-year fixed-rate mortgages fell to 6.92%, also the first decline in three weeks.
“First-time homebuyers account for about half of all purchase loans, and government lending programs are an important source of financing for these homebuyers,” Fratantoni said.
There was also a 5% increase in homeowners applying to refinance their loans, according to MBA data.
-Terry Lane