Recent economic updates featured various reports on inflation, the Federal Open Market Committee (FOMC) meeting led by Fed Chair Jerome Powell, and related press conferences. Additionally, weekly data on mortgage rates and jobless claims were also made available.
Federal Reserve Maintains Key Rate Range
Following the scheduled FOMC meeting last week, Federal Reserve policymakers decided to keep the current interest rate range unchanged at 5.00 to 5.25 percent. The announcement was made on Wednesday, taking into account factors such as the cumulative impact of monetary policy tightening, the time lag between policy changes and their effects on the economy, as well as inflation and global and domestic economic developments.
The Committee reaffirmed its commitment to achieving the two-percent inflation target. FOMC members considered various factors, including labor market indicators, inflationary pressures and expectations, and both domestic and global economic and financial developments.
Inflation Slows Down in May
According to the federal government’s report, inflation experienced a deceleration in May. The Consumer Price Index showed a month-to-month inflation growth rate of 0.10 percent, meeting expectations and lower than April’s 0.40 percent growth rate. Core inflation, which excludes volatile food and fuel sectors, remained unchanged from April, also recording a month-to-month growth rate of 0.40 percent. Year-over-year core inflation reached 5.30 percent, meeting expectations but lower than April’s 5.50 percent growth rate.
Mortgage Rates Decline; Jobless Claims Unchanged
Freddie Mac reported a decrease in average mortgage rates, as 30-year fixed-rate mortgages dropped by two basis points to 6.69 percent. On the other hand, 15-year fixed-rate mortgages rose by three basis points to an average rate of 6.10 percent. Jobless claims remained steady at 262,000 new claims filed, exceeding the expected figure of 245,000 initial claims and matching the previous week’s reading.
Improved Consumer Sentiment and Upcoming Reports
In June, the University of Michigan’s Consumer Sentiment Index showed improvement, reaching a reading of 63.9. This surpassed the expected reading of 60.8 and May’s index reading of 59.2. A reading above 50 indicates that most consumers have a positive outlook on current economic conditions.
Looking ahead, this week’s economic reporting will include data on home builder confidence, housing starts, and sales of previously-owned homes. Additionally, there will be weekly updates on mortgage rates and jobless claims.
