The prices of eggs continue to soar, but inflation is changing in the right direction. (action))
Consumer prices dropped by 0.1% in March, according to the consumer price index (CPI) Released by the Bureau of Labor Statistics (BLS). This is the first monthly decline since July 2022.
Annual inflation increased by 2.4% compared to an increase of 2.8% recorded in February. Basic inflation, which excludes volatile energy and food prices, has increased at a rate of 2.8% compared to last year, the lowest increase of 12 months since March 2021. A drop of 6.3% of gas prices more than compensating for the increase in electricity and natural gas indices. Food, however, increased by 0.4% in March. The meat, poultry, fish and egg index increased 7.9% in the last 12 months and the price of eggs jumped to 60.4%.
Inflation continues to progress to the target rate of 2% of the federal reserve. However, the impact of the implementation by President Donald Trump of new pricing measures could derail this progress and hinder economic growth, according to Jim Baird, director of investments of the financial advisers of Plante Moran.
“While consumers are preparing for the impact of prices on a multitude of basic products and discretionary goods, there is a considerable uncertainty about the way in which this short -term extent of the impact will be growth and inflation, although everyone's management is clearer,” said Baird. “This has sent economists to rush to update their forecasts to drop growth and increase the expected inflation for the duration of the year.”
Despite the concerns about the effects of President Trump's prices, the Fed continues to hold stable interest ratesAnd it should not make significant changes soon, including a drop in potential rate. While prices could lead to higher inflation and slower economic growth, the Fed expects more clarity on the full impact of these policies before deciding on any action plan.
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Mortgage rates have reached a two -month hollow this week, remain less than 7%
The risks of recession increase
President Trump's rates also contribute to an increased risk of recession. Several large financial institutions, including Goldman Sachs and JP Morgan, have increased their probabilities of recession. According to Baird, part of the problem is that, as prices increase due to prices, consumers can decide to limit their expenses.
“The feeling has been embittered in recent months, and there are already signs not only in a more prudent mood, but more restrictive expenses,” said Baird. “Prices can increase, but that does not mean that consumers will pay any price for any product. Some may grow but continue to spend, but many are much more likely to negotiate in cheaper alternatives or delay discretionary purchases.
“This reality increases the probability of a more notable slowdown in the rate of the economy, the risk of recession also increasing,” said Baird.
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The spring house purchase season seems promising
The data on the inflation of March shelters showed that it fell 4.0% against 4.2% in February. This is good news because inflation of the refuge has been a force majeure to maintain high inflation in recent years and could help advance the needle on interest rates.
Mortgage rates continue to lower, remaining less than 7% for the twelfth consecutive week and could increase spring sales, according to Freddie Mac's chief economist Sam Khater.
“While purchasing applications continue to climb, the spring home purchase season promises to be more favorable than last year,” said Khater.
The average fixed rate mortgage of 30 years was 6.62% for the week ending on April 10, according to the last Primary mortgage loan survey. This represents a decrease compared to the previous week, when it was on average 6.64% and less than the 6.88%, it was a year ago.
“Unfortunately, inflation remains painfully stubborn, well above the 2% target of the Fed for the drop in rates,” said Gabe Abshire, CEO of concierge. “Since the housing sector has a lower exposure to the current global commercial environment, it would be useful for the Fed to reduce prices and stimulate the market for the purchase of spring and summer houses.”
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