What did Chairman Powell say about rate cuts?
If you were hoping for a rate cut in 2024, you may be disappointed. Federal Reserve Chairman Jerome Powell spoke at a panel discussion yesterday. When asked about his confidence in the current fight against inflationary pressure, Powell stated, “Recent data have clearly not given us greater confidence (that inflation is coming fully under control and) instead indicate that it’s likely to take longer than expected to achieve that confidence.”
Powell went on to say, “If higher inflation does persist, we can maintain the current level of (interest rates) for as long as needed.”
This represented a change in tone from Chairman Powell. In testimony to Congress on March 7th, Powell stated that the Fed was ‘not far’ from gaining the confidence it needs to cut rates. He started downplaying that two weeks later at a press conference, but his recent comments have analysts thinking he’s looking far past June to cut rates, potentially as far as 2025.
Where were mortgage applications last week?
Mortgage applications increased for the second consecutive week despite the current elevated rate environment. The Mortgage Bankers Association announced that mortgage applications increased 3.3% week-over-week. Refinance applications were also up 0.5%, and 11% higher than the same week one year ago.
Joel Kan, the MBA’s Vice President and Deputy Chief Economist, said, “Rates increased for the second consecutive week, driven by incoming data indicating that the economy remains strong and inflation is proving tougher to bring down. Despite these higher rates, application activity picked up, possibly as some borrowers decided to act in case rates continue to rise.”
How’s the housing market in Minnesota?
According to a recent article, the housing market throughout the state of Minnesota continues to stay hot. New listings were up 7.3% in March 2024, and pending sales were up 11% based on data from Minnesota Realtors.
Geri Theis, president of Minnesota Realtors, said, “Our numbers for January and February were incredible numbers. We hadn’t seen them for quite some time, so we had a really good optimistic view. March numbers are still increasing so I’m still feeling optimistic.”
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