Inflation Trends
The Bureau of Labor Statistics (BLS) reported that inflation remained steady at 3.3% in May, slightly down from previous months. This stability is crucial for economic confidence. However, housing costs play a significant role in keeping inflation elevated.
Interest Rates Unchanged
Following a Federal Reserve meeting, Chair Jerome Powell announced that interest rates would remain unchanged. The Fed’s economic projections suggest only one rate cut in 2024. Good inflation readings influenced this decision.
Housing Supply Challenges
Despite stable inflation, housing supply remains a concern. Higher interest rates have increased construction costs and limited loans for new housing. Chair Powell acknowledges the shortage and calls for non-monetary policy solutions.
Sources:
- https://eyeonhousing.org/2024/06/fed-holds-rates-constant-sees-one-cut-for-2024/
- https://www.axios.com/2024/06/12/may-cpi-inflation-data-fed
- https://freddiemac.gcs-web.com/news-releases/news-release-details/mortgage-rates-continue-move-down-0?_gl=1*1yynmfg*_gcl_au*MTcyNTYzMTQuMTcxNTQ0NjcyMA..&_ga=2.205586906.832273563.1718561916-250820470.1706976253