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Fed Holds Rates Steady, Moodys Downgrades US Debt

 

Tariff negotiations have dominated headlines but along with the growing concern that tariffs will ultimately cause prices to go up, the US budget deficit is a huge concern. Moody's downgraded US debt which will impact borrowing costs on mortgages and all types of loans. 
The Fed held rates steady, saying that they are in a wait and see mode. Given the credit downgrade by Moody's the Fed may not have any room for lowering rates this year. Amidst global uncertainty over trade policy, the Fed hopes to avoid stagflation which was last seen in the early 1980s. Stagflation, as a reminder, is the combination of high unemployment, high inflation, and a lagging economy or recession. This appears to be more a matter of caution than cause for alarm. "The economy itself is still in solid shape," the Fed chair said during a post-meeting press conference. 
In California sales were down 3.4% in April as compared to March and down .2% as compared to last year.. Locally, we have more inventory on hand, more price reductions. See local stats below, bit of a mixed bag as some areas continue to rise and others are down.