Rates continue the roller coaster ride. Today, the national average is at 6.99%. This is the high end of the previous 30 days that have been range bound between 6.8-7%. 
Stock Market:
There were several economic data releases last week, and while they remain mixed, the stock market responded favorably. The S&P 500 posted a 5.33% return on the week with most of those gains following the ease of trade tensions between the U.S. and China. There was also news on the path for U.S. fiscal policy as the House unveiled their proposed tax bill. However, this will undoubtedly be revised as it makes its way through Congress. A resurgent stock market should help kickstart the stalling housing market as buyer's look less fearfully at their brokerage/retirement accounts.
Moody's Downgrade:
Moody's downgraded the US Government from it's top rating (AAA) to it's second highest rating (AA1), citing the country's rising debt as cause for concern. It's a 21-position scale so being the 2nd highest isn't bad, but the move did send a little panic through some investor's spines. The 10-year yield is up 8 bps early this week, which 30-year mortgages are directly tied to; however, these initial reactions can quickly reverse course.
Inflation:
Both CPI and Core CPI came in below expectations for the month. Year-over-year, CPI was 2.3% while Core CPI was 2.8%. Although both remain above the Fed’s 2% target, markets responded positively to the progress that was made, and inflation did not tick higher with the uncertainty surrounding tariffs. PPI and Core PPI were also below expectations for the month. The impact of tariffs on inflation will become clearer over time; however, the reports so far seem to show that price increases have not made their way to consumers.
Consumer Sentiment and Jobless claims:
The NFIB small business optimism index came in at 95.8, and although it was a month-over-month decline, it was better than expected. However, Consumer sentiment posted its second worst reading in history at 50.8. Retail sales dropped month-over-month, but when considering the prior revisions, the report still shows a consumer that remains resilient. Jobless claims remain well behaved at 229,000, showing a solid labor market. Perhaps the labor shortages from the pandemic have employers hesitant to reduce staff. Clearly, the market uncertainty has consumers worried. However, we have not seen it show up in much of the hard economic data nor have we seen consumers drastically change behaviors at this point. These mixed news reports make it hard for the Fed to cut rates. Keep calm and carry on should be their mantra. I asked ChatGPT for a pic of Jerome in the shirt - here ya go!
Fed Meeting:
The Federal Reserve maintained its benchmark rate at 4.25%–4.5% during their May 7 meeting. This marked the third consecutive meeting without a rate change, showing the Fed's cautious approach amid economic uncertainties. The press conference afterwards reiterated their desire to wait and see before moving rates, as inflation isn't going down like they want it to before cutting rates.
Local News:
The Stanley Hotel in Estes Park sold last week! Guess the price! After you guess, click the link below to find out.
https://www.9news.com/article/life/style/colorado-guide/stanley-hotel-sold-new-owner-denver-manager/73-48cce225-a80e-4cbf-abea-c5b5a5c80370
