Consumer Prices Surge, Fed Chair Jerome Powell Stresses Patience in Senate Banking Committee, Law Firm Investigates Inflated Appraisal Fees

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Inflation: Consumer Prices Surge

Consumer prices rose more than expected in January, as new inflation data released today revealed that headline prices increased by 3.0% year-over-year, slightly higher than December’s 2.9% gain. Monthly figures also showed a 0.5% rise, outpacing economists’ forecasts. A big contributor to the jump was a 15.2% spike in egg prices, the largest increase since 2015.

On the “core” inflation front, which excludes volatile food and gas costs, prices rose 0.4% month-over-month, the biggest increase since April 2023. Year-over-year, core inflation climbed to 3.3%, up from 3.2% in December. While shelter costs showed signs of easing, used car prices continued to climb for the fourth consecutive month.

This latest data has led traders to reduce expectations of a Fed rate cut, as inflation remains above the central bank’s 2% target. Stock futures dropped in response, with markets eyeing further developments closely. For now, the path ahead remains uncertain, especially with the inflation outlook further complicated by President Trump’s tariffs set to take effect next month.

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Fed Chair Jerome Powell Stresses Patience in Senate Banking Committee

Federal Reserve Chair Jerome Powell’s testimony before the Senate Banking Committee yesterday delivered key insights that could impact real estate markets. Powell reiterated that the Fed isn’t rushing to cut interest rates. With the economy holding steady, Powell emphasized that inflation, though persistent, doesn’t warrant immediate rate changes.

In addition to economic concerns, Powell faced tough questions about the Consumer Financial Protection Bureau, or CFPB, which plays a role in overseeing mortgage practices.  

Democrats praised the CFPB for its role in returning over $21 billion to consumers, highlighting its efforts to investigate illegal debt collection practices, clamp down on high fees, and ensure transparency in financial products. While Republicans have questioned the agency’s accountability, Powell explained that the Fed plays a limited role in overseeing the CFPB but supports its mission of consumer protection.

Powell’s testimony comes as rising tariffs and other economic shifts, like tax cuts, could add pressure to homebuyer budgets and impact market dynamics. Real estate agents should monitor these trends closely as they could shape buyer behavior and market stability. Powell will continue his testimony today before the House Financial Services Committee.

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Law Firm Investigates Inflated Appraisal Fees

A top law firm, Morgan & Morgan, is launching an investigation into appraisal management companies, or AMCs, and their role in driving up appraisal fees for homebuyers. The firm is asking consumers who feel they’ve been overcharged or misled about the breakdown of these fees to come forward.

AMCs, which act as intermediaries between lenders and appraisers, often bundle their fees with the cost of the appraisal, leading to inflated charges that buyers are not clearly informed about. In some cases, homebuyers may pay up to $800 or more for a standard appraisal that should cost much less.

The lack of transparency has appraisers concerned, as AMCs take a larger share of the fee, leaving less for the appraisers themselves. This has led to a decline in the number of appraisers in the field.

Morgan & Morgan is encouraging homebuyers to request a breakdown of their appraisal fees and compare costs in their area. If you believe you’ve been overcharged, the law firm is offering free case evaluations and is committed to fighting for consumers’ rights.

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