Susan Collins, president of the Fed in Boston, said at an Atlanta Fed conference that “mixed” recent inflation data showed the battle to reach the central bank’s 2% target was “going to take longer than I had previously thought” – and Cleveland president Loretta Mester also said she expected a months-long wait for lower rates.
Last week, new Bureau of Labor Statistics figures showed the consumer price index (CPI) for April rose by 3.4% on an annual basis, meeting analysts’ expectations, although it also ticked up by 0.3% compared with the previous month.
High mortgage rates continue to keep market cooler
The Fed’s reticence to start cutting rates has helped keep mortgage rates high, with the benchmark 30-year fixed-rate loan seeing its rate increase for five of the past six weeks and remaining resolutely above 7%.
It’s also kept a lid on the housing market, with many buyers remaining on the sidelines as they wait for the first inkling that the Fed could be prepared to cut.
The National Association of Realtors (NAR) said on Wednesday (May 22) that existing home sales unexpectedly dropped in the US last month, falling by 1.9% nationally and coming in lower across each part of the country.
