Fed holds line on rates
The Federal Reserve held steady on interest rates Wednesday, even as two board members and President Donald Trump called for a cut.
The central bank said it would keep the federal funds rate at 4.25% to 4.5%. However, Fed governors Michelle Bowman and Christopher Waller said they wanted to lower rates by a quarter-point.
Fed Chairman Jerome Powell, citing the potential effects of Trump's tariff plan, has expressed the need for caution before cutting rates. But Trump has been adamant in seeking a reduction and reiterated that in a social media post earlier Wednesday.
Asked at an afternoon press conference about consumers still facing elevated mortgage rates, Powell said the Fed isn't the main driver of home borrowing costs.
"I think the best thing we can do for housing is to have 2% inflation and maximum employment," he said.
Meanwhile, it will take a couple of months to get an accurate reading on the economy and inflation, according to Melissa Cohn, regional vice president of William Raveis Mortgage and a longtime industry veteran.
"The next rate cut may not happen until the end of the year,” she said in a statement.
GDP surprises with 3% gain
Gross domestic product, beat analyst expectations, increasing at an annual rate of 3% in the second quarter, the U.S. Commerce Department reported Wednesday.
The improvement came as a result of a drop in imports and an increase in consumer spending, the agency said. A consensus of analysts had predicted a 2.5% gain.
GDP is a measure of the country's economic output. President Donald Trump announced Wednesday that he would impose a 25% tariff on India, but some analysts said the second quarter GDP reading is an indication that the tariff plan hasn't hurt the economy as many people had feared.
Construction hiring lackluster
The construction industry's hiring rate during the first half of the year was lower than during the first six months of any year since the data collection started in 2000, according to an Associated Builders and Contractors analysis of government data.
Relatively few job openings and weak hiring portend soft demand for labor, according to Anirban Basu, the association's chief economist.
“That said, these data likely reflect the fact that the residential segment has struggled mightily this year, while nonresidential employment data have been more upbeat," Basu said in a statement.
The construction industry had 246,000 job openings at the end of June, an increase of 14,000 from May but a decrease of 39,000 from the end of June 2024, the trade group said of reviewing the U.S. Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey.
