Consumer spending soared and mortgage rates shifted again—here’s what it means for the market and for you.
🏷️ Consumer Spending Jumps
Last week brought another rollercoaster for mortgage markets, driven by tariff talk and economic shifts. One of the biggest headlines? A surge in consumer spending as shoppers rush to buy before anticipated price hikes take effect.
In March, retail sales jumped 1.4% from February, the biggest increase since January 2023. Car sales led the charge with a massive 5.3% spike, while spending on sporting goods, hobbies, and building materials also showed strong growth.
🌍 Why Import Prices Matter Now
Usually overlooked, the monthly import price report from the Bureau of Labor Statistics is now under the microscope. With tariffs looming, investors are watching to see how these prices move.
March’s import prices were flat month-over-month, meaning exporters haven’t yet lowered prices to offset tariff effects. It raises a big question: Will global suppliers absorb the cost, or will U.S. households and businesses feel the pinch?
🏦 Fed Chair Powell Weighs In
In a speech Wednesday, Fed Chair Jerome Powell acknowledged a “challenging scenario” ahead. Tariffs could simultaneously increase inflation and slow growth, creating a conflict with the Fed’s dual mandate.
Translation: The Fed is pausing to assess. Investors now expect a potential rate cut in June.
🇪🇺 ECB Makes a Move
The European Central Bank reduced interest rates by 25 basis points, a widely expected move. Their outlook? Not rosy. They cited slowing growth and rising trade tension as key concerns, with tightening financial conditions ahead.
💬 What This Means for You
-
If you're a buyer, the dip in mortgage rates might be a window of opportunity—but price hikes on goods could impact your budget.
-
If you're a seller, strong consumer activity could mean more motivated buyers in the short term.
Need help navigating all this? Call Me
