Federal Reserve Watch for May 28: Inflation Remains Concern, Fed Officials Say

Fed Vice Chair Philip Jefferson (voter) said that he remains focused on bringing inflation down to the 2% goal but would not comment on the future path of monetary policy, saying that he is taking a meeting-by-meeting approach.

Fed Governor Lisa Cook (voter) said that she is prepared to raise interest rates if inflation remains elevated but said that she is expecting inflation to slow without rate increases.

St. Louis Fed President Alberto Musalem (nonvoter) said that inflation remains a concern and that returning inflation to the 2% goal is still a priority. Musalem was cautious about the role that productivity could play in lowering inflation.

Recent comments of note:

(May 22) Fed Chair Kevin Warsh (voter) was sworn in, saying that he intends to be reform-oriented and abandoning old models that were not serving the Fed's mission.

(May 22) Fed Governor Christopher Waller (voter) suggested that the Fed's policy rate could remain on hold for some time, indicating that the risks are tilting back toward inflation. Waller also said that a rate increase is possible if inflation remains high rather than comes back down.

(May 21) Richmond Fed President Tom Barkin (nonvoter) said that he expects supply shortages and economic uncertainty due to the Middle East conflict could eventually have an impact on consumer spending but said that so far consumers are seeing higher prices as temporary.

Daily Roundup of Key US Economic Data for May 28

The second estimate of Q1 GDP showed a 1.6% gain after a 0.5% increase in the previous quarter, but a downward adjustment from a 2% gain in the advance estimate.Personal spending growth was revised down 1.4% from a 1.6% increase in the advance estimate, below a 1.9% increase in the previous quarter.There were also negative adjustments to nonresidential fixed investment and inventories that were partially offset by upward revisions to residential fixed investment and net exports. Government spending growth was unrevised.The GDP price index rose by 3.5%, revised down from a 3.6% gain in the advance reading, with the overall PCE price reading unrevised at a 4.5% gain and core PCE price reading revised up slightly to a 4.4% increase from 4.3% in the advance estimate.Personal income was flat in April, below expectations after a 0.5% gain, while personal consumption expenditures rose by an as-expected 0.5% in April after a 1% increase in March.After an adjustment for a 0.4% increase in the PCE price index, real consumption was up 0.1% in April after a 0.3% increase in March. The year-over-year rate for the overall price index accelerated to 3.8% from 3.5%Core PCE prices rose by 0.2% in the month after a 0.3% gain while the year-over-year rate accelerated to 3.3% from 3.2%.Durable goods new orders rose by 7.9% in April, while shipments increased by 0.5%.Excluding transportation, new orders were still up 1.1%, and shipments rose by 0.5%, suggesting underlying strength in demand.New-home sales fell to a 622,000 annual rate in April from a 663,000 rate in March and was down 11.3% from the 701,000 pace in April 2025.Initial jobless claims increased by 5,000 to 215,000 in the week ended May 23, lifting the four-week moving average by 6,250 to 209,000.Insured claims rose by 15,000 to 1.786 million in the employment survey week ended May 16. Insured claims were at a level of 1.776 million in the employment survey week ended April 18.Natural gas stocks rose by 92 billion cubic feet to 2.483 trillion cubic feet in the week ended May 22, up 0.9% from a year earlier and 6.2% higher than the seasonal average for the current week over the previous five years.Total crude oil inventories fell by 12.4 million barrels in the week ended May 22, with commercial oil inventories down 3.3 million barrels and stocks in the US Strategic Petroleum Reserve down 9.1 million barrels. Gasoline inventories and distillate inventories both decreased last week.The Q2 GDP nowcast estimate from the Atlanta Fed is for a 3.8% gain, revised down from the previous estimate of a 4.3% gain.

April US New-Home Sales Falls More Than Expected, Down Year-Over-Year

US new-home sales decelerated to a 622,000 annual rate in April from a downwardly revised 663,000 rate in March, well below the 660,000-rate expected in a survey compiled by Bloomberg.Home sales were down 11.3% from April 2025.The supply of homes available for sale increased by 1.7% to 489,000 but decreased by 2.2% from a year ago.The median sales price rose to $422,500 from $391,100 in April and was above the $413,600 level a year ago.The monthly new-home sales report from the US Commerce Department measures sales of new single-family homes at the time of the contract signing.The report includes the number of new homes available for sale and the median sales price. A strong reading is a positive sign for mortgage lenders, home builders and related consumer product companies.

Federal Reserve Watch for May 28: Inflation Remains Concern, Fed Officials Say

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International6d ago
Daily Roundup of Key US Economic Data for May 28
The second estimate of Q1 GDP showed a 1.6% gain after a 0.5% increase in the previous quarter, but a downward adjustment from a 2% gain in the advance estimate.Personal spending growth was revised down 1.4% from a 1.6% increase in the advance estimate, below a 1.9% increase in the previous quarter.There were also negative adjustments to nonresidential fixed investment and inventories that were partially offset by upward revisions to residential fixed investment and net exports. Government spending growth was unrevised.The GDP price index rose by 3.5%, revised down from a 3.6% gain in the advance reading, with the overall PCE price reading unrevised at a 4.5% gain and core PCE price reading revised up slightly to a 4.4% increase from 4.3% in the advance estimate.Personal income was flat in April, below expectations after a 0.5% gain, while personal consumption expenditures rose by an as-expected 0.5% in April after a 1% increase in March.After an adjustment for a 0.4% increase in the PCE price index, real consumption was up 0.1% in April after a 0.3% increase in March. The year-over-year rate for the overall price index accelerated to 3.8% from 3.5%Core PCE prices rose by 0.2% in the month after a 0.3% gain while the year-over-year rate accelerated to 3.3% from 3.2%.Durable goods new orders rose by 7.9% in April, while shipments increased by 0.5%.Excluding transportation, new orders were still up 1.1%, and shipments rose by 0.5%, suggesting underlying strength in demand.New-home sales fell to a 622,000 annual rate in April from a 663,000 rate in March and was down 11.3% from the 701,000 pace in April 2025.Initial jobless claims increased by 5,000 to 215,000 in the week ended May 23, lifting the four-week moving average by 6,250 to 209,000.Insured claims rose by 15,000 to 1.786 million in the employment survey week ended May 16. Insured claims were at a level of 1.776 million in the employment survey week ended April 18.Natural gas stocks rose by 92 billion cubic feet to 2.483 trillion cubic feet in the week ended May 22, up 0.9% from a year earlier and 6.2% higher than the seasonal average for the current week over the previous five years.Total crude oil inventories fell by 12.4 million barrels in the week ended May 22, with commercial oil inventories down 3.3 million barrels and stocks in the US Strategic Petroleum Reserve down 9.1 million barrels. Gasoline inventories and distillate inventories both decreased last week.The Q2 GDP nowcast estimate from the Atlanta Fed is for a 3.8% gain, revised down from the previous estimate of a 4.3% gain.

International6d ago
Atlanta Fed US Q2 GDP Nowcast Estimate 3.8% Gain Vs. Previous 4.3% Gain

International6d ago
April US New-Home Sales Falls More Than Expected, Down Year-Over-Year
US new-home sales decelerated to a 622,000 annual rate in April from a downwardly revised 663,000 rate in March, well below the 660,000-rate expected in a survey compiled by Bloomberg.Home sales were down 11.3% from April 2025.The supply of homes available for sale increased by 1.7% to 489,000 but decreased by 2.2% from a year ago.The median sales price rose to $422,500 from $391,100 in April and was above the $413,600 level a year ago.The monthly new-home sales report from the US Commerce Department measures sales of new single-family homes at the time of the contract signing.The report includes the number of new homes available for sale and the median sales price. A strong reading is a positive sign for mortgage lenders, home builders and related consumer product companies.