The Federal Open Market Committee is expected to keep interest rates steady at their next meeting in May, with traders projecting a chance of cuts in June. Concerns about the U.S. economy are fueled by tariffs and recession warnings, yet Fed Chair Jerome Powell suggests the likelihood of recession remains manageable. Meanwhile, housing data indicate a slight rise in pending single-family home sales, largely attributed to more affordable mortgage rates compared to last year, despite relative stability in home prices.
According to the CME Groups FedWatch tool, nearly 90% of traders believe that rates will stay the same in May, with a significant chance of cuts in June.
Fed Chair Jerome Powell acknowledged the ongoing possibility of recession, indicating a stable yet watchful stance but noted the probability of recession is not currently high.
UCLA forecasters recently issued a recession watch due to multiple economic uncertainties, including potential tariffs that may affect trade relations.
Despite the challenges, recent mortgage rates have stabilized, making home purchases slightly more affordable compared to the prior year.
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