The Fed’s April Remarks: Economic Forecast

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Fed Chairman Jerome Powell Addresses Economic Outlook, Inflation, and Impact of Trade Policies in April Remarks

Federal Reserve Chairman Jerome Powell delivered remarks on Friday, April 4th, discussing the current economic outlook and the Fed’s approach to monetary policy. Powell began by emphasizing the importance of public understanding, noting that the Fed’s policies are more effective when they are clearly communicated, with journalists playing a key role in that effort.

He highlighted that while economic uncertainty has increased, the economy is still in a solid position. The labor market remains balanced, with unemployment at 4.2% in March, consistent with the low levels seen since last year. However, Powell noted that inflation, while improving, remains above the Fed’s 2% target. Recent data shows a decline in inflation from the pandemic highs of 2022, but progress has slowed. Core inflation, excluding food and energy prices, stands at 2.8%.

Powell addressed concerns surrounding new federal policies, particularly trade tariffs, which are expected to contribute to higher inflation and slower economic growth in the near future. The impact of these tariffs, he explained, is difficult to fully assess, as the details on their scope and duration remain unclear. However, Powell warned that these tariff increases will likely result in a temporary rise in inflation, with the potential for more persistent effects if inflation expectations aren’t managed properly.

Despite these challenges, Powell stressed that the Fed remains committed to its goals of maximum employment and price stability. He also acknowledged that the economic landscape is evolving with substantial policy changes underway, such as shifts in trade, immigration, fiscal policy, and regulation. While the Fed does not weigh in on these policies directly, Powell emphasized that the Fed will continue to assess their economic impact and adjust its monetary policy accordingly.

Concluding his remarks, Powell stated that the Fed is in a strong position to remain patient and wait for more clarity before making any decisions on future policy changes. He reaffirmed that the Fed will stay vigilant in managing inflation expectations and ensuring that any rise in prices does not become an ongoing issue.

Powell’s comments reflect the Fed’s ongoing commitment to navigating economic uncertainties while striving to maintain stability in the labor market and inflation rates.

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Trump’s Tariffs to Raise New-Home Costs by $9,200 – Here’s How to Advise Clients in Impacted States

President Donald Trump’s new tariffs on imported goods are expected to raise the cost of building new homes by an average of $9,200, according to homebuilders. While the worst-case scenario was avoided, the new trade policy is set to increase construction costs, which could be passed on to buyers or squeeze builders’ profit margins.

A recent survey revealed that the new tariffs, which bring the effective tariff rate on imports to around 26%, will hit the housing market hard. The states most affected are those where new construction plays a significant role in the market. Idaho, for instance, saw 40% of active listings last month as new builds, followed by North Carolina at 33%, Delaware at 31%, and Utah and Nebraska at 28%.

While new homes make up a smaller portion of the overall housing market, these states, where demand for housing is high, will feel the impact most. As tariffs increase costs, homebuyers may face even higher prices in these regions.

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Federal Cuts Strain Section 8 in Massachusetts, Sparking Fears for Low-Income Renters

And finally, Federal budget cuts are now affecting Section 8 housing programs, raising concerns for low-income renters across Massachusetts. The state’s housing office has announced cuts to additional benefits for those with federal housing vouchers, including utility and security deposit allowances. This move comes as the Executive Office of Housing and Livable Communities struggles with rising rent costs and insufficient federal funding.

Sarah Scott of Metro Housing Boston explained that while no vouchers will be taken away from current recipients, these cuts are necessary to preserve the program. As rent prices continue to climb, many households will feel the squeeze, especially those already living on tight budgets.

The impact will be felt most in areas with high demand for housing, where low-income residents rely heavily on Section 8 vouchers. According to a recent report, Massachusetts has a waitlist of over 30,000 people for Section 8, with some waiting up to 13 years for assistance. Housing advocates like Rachel Heller from the Citizens’ Housing and Planning Association are concerned that these cuts, coupled with ongoing federal funding shortages, will lead to devastating consequences for renters and property owners alike.

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