Bank of England rate cut expected as Fed holds again

Chancellor welcomes interest rates cut

The Bank of England has cut interest rates to 5% at its August Monetary Policy Committee meeting, the first reduction of the UK’s base rate in four years. Responding to the cut, Chancellor of the Exchequer Rachel Reeves said: “Homeowners will welcome this cut in interest rates, but I know that millions of people are still paying higher mortgage rates after the Conservatives mini-budget. Report by Covellm. Like us on Facebook at http://www.facebook.com/itn and follow us on Twitter at http://twitter.com/itn

New US Home Construction Sinks to Slowest Pace in 4 Years

New US Home Construction , Sinks to Slowest Pace in 4 Years. Government data released on June 20 indicates that new home construction in America dropped in May to the slowest pace since June 2020, Yahoo Finance reports. . Housing starts dropped 5.5%, and building permits dipped 3.8%. Home completions also fell to the lowest amount since September 2022. High interest rates, set by the Fed to help tame inflation, have resulted in high mortgage rates. But recent data has suggested that inflation has started to cool, which may give the Fed the confidence it needs to lower rates. The weakest U.S. housing starts since the pandemic-led shutdowns are fairly convincing evidence of restrictive monetary policy. , Sal Guatieri, senior economist at BMO Capital Markets, via note. While a growing population and workforce are providing some support, US home builders won’t become busier until borrowing costs fall, Sal Guatieri, senior economist at BMO Capital Markets, via note. Meanwhile, other data released on June 20 showed that first-time applications for unemployment benefits dropped last week. However, continuing claims rose for a seventh consecutive week

Mortgage Rates Continue to Fall, Raising Hopes of the Fed Cutting Rates

Mortgage Rates Continue , to Fall, Raising Hopes of the , Fed Cutting Rates. ABC reports that borrowing costs for home loans continued to ease this week, with the average rate on a 30-year mortgage falling to its lowest level since April. According to mortgage buyer Freddie Mac, the rate fell from 6.95% to 6.87% last week. . That figure is still significantly higher than what the rate was during the same time last year, which was at an average of 6.67%. . 15-year fixed-rate mortgages also eased, falling from 6.17% last week to 6.13%. . During the same time last year, the average rate was at 6.03%. Those higher rates can add hundreds of dollars to monthly costs for borrowers, which limits the purchasing options of potential homebuyers. Mortgage rates fell for the third straight week following signs of cooling inflation and market expectations of a future Fed rate cut, Sam Khater, Freddie Mac’s chief economist, via ABC. ABC reports that rates are influenced by a number of factors, including the Federal Reserve's interest rate policy and the 10-year Treasury yield. ABC reports that rates are influenced by a number of factors, including the Federal Reserve's interest rate policy and the 10-year Treasury yield. Due to yields also beginning to ease, the Federal Reserve could start to drop its main interest rate after hiking it up to the highest level in over 20 years. Last week, Fed officials suggested that they would make just one cut to their benchmark interest rate in 2024, down from previous projections of three cuts for the year.

Surge of New Applications for Unemployment Benefits May Signal Cooling Job Market

Surge of New Applications for , Unemployment Benefits , May Signal Cooling Job Market. Last week, the number of people in the United States filing for unemployment benefits reached the highest level in ten months last week. . ABC reports that the news comes as a potential sign that the U.S. labor market may be slowing under the burden of high interest rates. . The week ending June 8 saw applications for jobless benefits rise by 13,000 to reach 242,000. . According to Labor Department data, that is up from 229,000 new applications the week before. The number also represents the highest number of new applications since August of 2023, while also being significantly higher than the 225,000 new claims forecast. ABC reports that weekly unemployment claims have lingered at historically low levels since millions of jobs disappeared with the COVID-19 pandemic. ABC reports that weekly unemployment claims have lingered at historically low levels since millions of jobs disappeared with the COVID-19 pandemic. Since March of 2022, the Federal Reserve has raised benchmark rates 11 times in an attempt to reign in inflation which has risen to a four-decade high. While the latest data suggests that consumer inflation cooled in May, the Federal Reserve has decided to leave rates at a 23-year high. According to Fed Chair Jerome Powell, officials are waiting for more evidence that prices are reaching their target of two percent. ABC reports that a total of 1.82 million Americans were collecting unemployment benefits in the week ending June 1. . ABC reports that a total of 1.82 million Americans were collecting unemployment benefits in the week ending June 1.

Fed Holds Steady With Interest Rates at 2-Decade High

Fed Holds Steady , With Interest Rates at , 2-Decade High. On June 12, the Federal Reserve chose to hold interest rates at a two-decade high while it waits to see more signs of inflation going down. 'The Guardian' reports that officials at the United States central bank expect to make a single rate cut in 2024, according to the latest projections. In previous projections, policymakers expected the Fed to make three cuts in 2024. . At the latest meeting, the Fed chose to keep rates at the same place they've been for nearly a year, between 5.25% and 5.5%. Despite recent data suggesting that inflation may be easing, the Fed clearly doesn't see it moving at a pace that would lead it to start cutting rates. In May, inflation cooled slightly across the U.S., according to the latest consumer price index, however consumers remain frustrated over skyrocketing prices. In May, inflation cooled slightly across the U.S., according to the latest consumer price index, however consumers remain frustrated over skyrocketing prices. 'The Guardian' reports that price growth has slowed significantly since surging over 9% in 2022, its highest level in a generation. 'The Guardian' reports that price growth has slowed significantly since surging over 9% in 2022, its highest level in a generation. May saw prices for air fare and fuel go down, inflation for grocery prices remained flat, and shelter costs continued to rise. May saw prices for air fare and fuel go down, inflation for grocery prices remained flat, and shelter costs continued to rise. Overall, prices remained unchanged on a month-to-month basis as the Fed emphasized that it would wait for inflation to hit its previously-stated target of 2%. The committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2%, Federal Reserve statement, via Fox News