After eleven rate hikes since March 2022, the Fed once again left their benchmark Federal Funds Rate unchanged at a range of 5.25% to 5.5%. This decision was unanimous and marks the sixth straight meeting they held rates steady. The Fed Funds Rate is the interest rate for overnight borrowing for banks and it is not the same as mortgage rates. The Fed has been aggressively hiking the Fed Funds Rate throughout this cycle to try to slow the economy and curb the runaway inflation that became rampant over the last few years.

What’s the bottom line? After some recent inflation readings were hotter than expected, some economists wondered if the Fed would resume hikes to the Fed Funds Rate. However, Fed Chair Jerome Powell emphasized a hike was “unlikely,” adding that the Fed would instead keep the Fed Funds Rate at its current level if tighter conditions were warranted. Powell also reiterated that the Fed does not expect to cut rates until members are confident that inflation is moving sustainably towards their 2% target as measured by annual Core Personal Consumption Expenditures, which is at 2.8% as of March.

However, a sharp rise in the unemployment rate (which has been in a narrow range between 3.7% and 3.9% since August) could also impact the timing for rate cuts. While the Fed’s latest forecasts showed that seventeen of nineteen Fed members don’t see the unemployment rate rising above 4.1%, an increase over this level could pressure the Fed to cut rates, given their dual mandate of price stability and maximum employment.

Housing and labor sector data will share headlines with the Fed, starting Tuesday with appreciation data for February from Case-Shiller and the Federal Housing Finance Agency. We’ll also see updates on job openings and private payrolls (Wednesday), unemployment claims (Thursday), and nonfarm payrolls and the unemployment rate (Friday).

The Fed’s meeting begins Tuesday, with their Monetary Policy Statement and press conference coming on Wednesday. Investors will be closely listening for news regarding the timing of rate cuts later this year.

Initial Jobless Claims fell by 5,000 in the latest week, as another 207,000 people filed for unemployment benefits for the first time. Continuing Claims also declined by 15,000, with 1.781 million people still receiving benefits after filing their initial claim.

What’s the bottom line? The low level of Initial Jobless Claims suggests that employers are still trying to hold on to their workers. Yet, Continuing Claims are still trending near some of the hottest levels we’ve seen in recent years, as challenges remain for job seekers searching for their next position.

May 2 is National Truffles Day! Celebrate with these delicious and decadent Chocolate Truffles courtesy of New York Times Cooking. Yields 24 truffles.

Heat 7/8 cup of heavy cream in a pot until it steams. Add 8 ounces of chopped bittersweet chocolate to a bowl, pour hot cream on top, and stir until chocolate is melted and incorporated into the cream. Chill until solid all the way through, around 1 to 2 hours.

Using a chilled melon baller, scoop out a tablespoonful and quickly roll into a ball. Repeat with remaining chocolate, lining truffles on a plate or baking sheet. If truffles become too soft to handle, place them in refrigerator or freezer for a few minutes. Roll truffles in cocoa powder, confectioners’ sugar, or a mixture of sugar and cinnamon.

Enjoy immediately or store in refrigerator for up to four days.

The first reading of the first quarter 2024 Gross Domestic Product (GDP) showed that the U.S. economy grew by 1.6%. This was well below both the 2.5% estimate and the 3.4% growth seen in the fourth quarter of last year.

What’s the bottom line? Slower economic growth is typically good news for the bond market, but the hotter than expected inflation component within the report led to a sell-off when the data was reported last Thursday. Note that this data is subject to revision when the second and final readings are released on May 30 and June 27, respectively. However, the weaker than expected initial reading is disappointing given that GDP functions as a scorecard for the country’s economic health.

Pending Home Sales rose 3.4% from February to March per the National Association of REALTORS® (NAR), coming in well above estimates.

This report measures signed contracts on existing homes, making it an important forward-looking indicator for closings on these homes, which are measured in the Existing Home Sales report.

What’s the bottom line? The Pending Home Sales index hit its highest level in a year, showing that activity is picking up heading into the spring homebuying season. An increase in inventory and eventual decline in mortgage rates will only boost these sales figures, with NAR’s Chief Economist, Lawrence Yun, noting, “Inventory will grow steadily from more home construction, and various life-changing events will require people to trade up, trade down or move to another location.”

After falling in February, signed contracts on new homes rebounded 8.8% in March to a 693,000-unit annualized pace, reaching their highest level since September. Sales were also 8.3% higher than a year earlier, as the persistent shortage of previously owned homes for sale continues to fuel demand for new construction.

What’s the bottom line? Despite the strong headline figure, some media pundits pointed to the decline in the median sales price, which was down nearly 2% from a year ago, to say the report was a miss. But the median sales price did not decline because of falling home prices (which continue to rise per Case-Shiller and other indexes), or a growing number of price cuts from builders. In fact, 36% of builders reported cutting prices in December, versus just 24% in March and 22% in April per the National Association of Home Builders.

The median sales price represents the mid-price of sales, meaning it’s influenced by the mix of sales in any given month. March’s decline in the median sales price stems from the sale of more homes at lower price points. Builders are constructing smaller, more affordable homes to meet buyer demand, and that pushed the median sales price lower comparatively.

March’s Personal Consumption Expenditures (PCE) showed that headline inflation rose 0.3% from February, with the year-over-year reading up from 2.5% to 2.7%.

Core PCE, the Fed’s preferred method which strips out volatile food and energy prices, also rose by 0.3% monthly. The year-over-year reading held steady at 2.8%, stalling progress toward the Fed’s 2% target.

What’s the bottom line? The Fed has been working hard to tame inflation, hiking its benchmark Fed Funds Rate (which is the overnight borrowing rate for banks) eleven times between March 2022 and July 2023. These hikes were designed to slow the economy by making borrowing more expensive, lowering the demand for goods, and thereby reducing pricing pressure and inflation.

The Fed has held rates steady since last September because inflation had been showing good progress lower before stalling in more recent reports. At their meeting in March, the Fed still signaled that three rate cuts are ahead this year. Will they change their tune at their meeting this week? We’ll find out on Wednesday with their Monetary Policy Statement and press conference.

April 23 is National Picnic Day. Make these Blackberry-Oat Crumble Bars courtesy of Southern Living for a perfectly delicious and portable picnic treat. Yields 24 bars.

Preheat oven to 350 degrees Fahrenheit. Stir together 6 cups rolled oats, 2 1/4 cups packed light brown sugar, 2 1/4 cups all-purpose flour, 2 cups melted butter, 1 teaspoon kosher salt and 1 teaspoon baking soda. Remove 3 cups of the oat mixture and set aside.

Press remaining oat mixture in an even layer on a buttered 12×17-inch rimmed baking sheet. Bake until golden brown, approximately 20 minutes. Cool completely, for around 30 minutes.

Meanwhile, stir together 9 cups blackberries, 1 cup sugar, 1/2 cup lemon juice and 1/4 cup corn starch in a large saucepan. Cook over medium until syrup thickens and bubbles, about 8 minutes. Pour over prepared crust and top with reserved crumble. Bake at 350 degrees Fahrenheit until the topping is golden brown, around 30 to 35 minutes.

Cool completely before cutting into bars.

While speaking to a policy forum on U.S.-Canada economic relations, Fed Chair Jerome Powell said that recent data has “clearly not given us greater confidence” that inflation is moving toward the Fed’s 2% target. This includes hotter than expected consumer inflation readings in recent months, especially as measured by the Consumer Price Index.

Remember, the Fed aggressively hiked their benchmark Fed Funds Rate (the overnight borrowing rate for banks) eleven times between March 2022 and July 2023 to slow the economy and curb runaway inflation. The Fed has held rates steady as of their meeting last September because inflation had been showing good progress lower before stalling in more recent reports.

What’s the bottom line? Powell said it will likely take longer to achieve confidence that inflation is progressing lower, signaling that the timing for rate cuts will probably be delayed and rates will be higher for longer until confidence is restored. This more hawkish tone was echoed by other Fed members last week as well, including New York Fed President John Williams and Atlanta Fed President Raphael Bostic.

Initial Jobless Claims were flat in the latest week, as another 212,000 people filed for unemployment benefits for the first time. However, Continuing Claims rose by 2,000, with 1.812 million people still receiving benefits after filing their initial claim.

What’s the bottom line? Initial Jobless Claims can be volatile from week to week, but their relatively low level suggests that employers are still trying to hold on to their workers. Yet, Continuing Claims are still trending higher near some of the hottest levels we’ve seen in recent years, as it’s become harder for some people to find new employment once they are let go.

Even though home builder sentiment held steady, builders pulled back on new construction last month, with Housing Starts falling nearly 15% from February. Starts for single-family homes, which make up the bulk of homebuilding and are the most crucial due to buyer demand, were also down 12.4%. There was a similar trend in future construction, with Building Permits moving lower despite much needed supply.

What’s the bottom line? The NAHB noted that higher than expected interest rates, hotter than anticipated inflation, and higher supply side costs all contributed to the construction slowdown last month. Danushka Nanayakkara-Skillington, NAHB’s Assistant VP for Forecasting and Analysis, added that single-family construction will also likely decline in April, given the drop in building permits last month.

Home prices should remain supported, as there still is not enough supply coming on the market to meet demand, showing that opportunities remain to build wealth through homeownership.

Confidence among home builders remained just above the key breakeven threshold of 50 for the second straight month, per the National Association of Home Builders (NAHB), as their Housing Market Index stayed at 51 in April. Any score over 50 on this index, which runs from 0 to 100, signals that more builders view conditions as good than poor.

Among the three index components, current and future sales expectations both remain in expansion territory at 57 and 60, respectively, though future expectations have softened as some buyers remain on the fence. The gauge judging buyer traffic moved higher, but it’s still in contraction territory.

What’s the bottom line? NAHB’s Chief Economist, Robert Dietz, explained, “April’s flat reading suggests potential for demand growth is there, but buyers are hesitating until they can better gauge where interest rates are headed.”

After hitting their highest level in a year in February, Existing Home Sales fell 4.3% in March to a 4.19-million-unit annualized pace, per the National Association of REALTORS® (NAR). This report measures closings on existing homes in March and likely reflects people shopping for homes in January and also in February when rates began to tick higher.

What’s the bottom line? While the pace of sales declined in March, it remains at the second highest level since last May, with NAR’s Chief Economist, Lawrence Yun, confirming that sales have rebounded from cyclical lows.

In addition, some of the internals within the report showed signs of strength. Homes remained on the market for a shorter period (an average of 33 days in March down from 38 days in February), while a greater number of homes sold above list price (29% in March versus 20% in February). This signals demand and competition remains ahead of the spring buying season.

Plus, there was some good news on the inventory front, as there were 1.11 million homes available for sale at the end of March, up 4.7% from February and 14.4% from a year earlier. While this remains below healthy levels, rising inventory is certainly a step in the right direction to help improve the persistent tight housing supply we’ve seen across the country. Yun added that “more inventory is always welcomed in the current environment.”

It’s National Grilled Cheese Month. This Cheddar and Apple Grilled Cheese Sandwich from the Food Network is equally parts gooey and delicious – everything grilled cheese should be! Yields two sandwiches.

Thinly slice half an apple. Place 2 slices of sourdough bread on a cutting board. Top each with two slices of cheddar cheese, the apple slices, a third slice of cheese and another piece of bread. Press down lightly.

In a large skillet, heat 1 tablespoon butter over medium-low heat. Add the sandwiches and cook until the bread toasts and the cheese is slightly melted, about 3 to 5 minutes. Flip with a spatula and add another tablespoon of butter to the pan. Cook until the other side is toasted and the cheese is melted, around 3 minutes more. Adjust the heat as needed to keep the bread from burning before the cheese melts.

Enjoy with your favorite soup, side or simply on its own!