What did Chairman Powell have to say?
U.S. Federal Reserve Chairman Jerome Powell testified in Congress yesterday. He spoke specifically about rate cuts in the coming months and stated that rate cuts “really will depend on the path of the economy. Our focus is on maximum employment and price stability, and the incoming data as they affect the outlook, and those are the things we’ll be looking at.”
Powell did say that rate cuts will “likely be appropriate” later this year if conditions warrant. He would need to see a continued decline in inflationary pressures and see the CPI get closer to the target of 2%. He also stated that the economy is clear of immediate recession risks.
How did the latest jobs data look?
The Job Openings and Labor Turnover Survey from the U.S. Labor Department showed that job openings in January 2024 fell by 26,000, hiring declined by 100,000, and quits also decreased by 54,000.
Quits were at the lowest level in 3 ½ years, but job openings saw a small decrease month-over-month. There were also 1.45 jobs per unemployed person in January 2024. That’s up from 1.42 in December 2023.
Sarah House, a senior economist at Wells Fargo in Charlotte, NC, said, “The JOLTS data signal that the jobs market is slowly settling down, consistent with wage, and thus inflation, pressures cooling without a worrisome slowdown in net job creation and overall economic activity.”
Where did mortgage rates end up?
The national average for a 30-year, fixed-rate mortgage dipped 0.06% to 6.97%* after Chairman Powell spoke and the jobs data was released. This is the first time the national average for a 30-year, fixed-rate mortgage is under 7.00% since February 13th.
Inflation data was seen as the cause of the spike a few weeks ago. We get an update on inflation data next week.
* National average rates accurate as of 3/6/24 from MortgageNewsDaily.com and are not advertised rates from Guaranteed Rate.
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