Good afternoon everyone we appreciate You spending some of your day with us Right now it's about 2 pm here on the East Coast I'm Errol Bonnet and I'm Lana Zach we are now just moments away from The federal reserve's decision on Interest rates following its latest Meeting now the central bank is not Expected to cut rates because key Economic data shows inflation just Persists across the country the last Rate hike you may remember was back in July of 2023 and rates have remained Steady since CBS News business analyst Jill slesinger is here with us in studio 57 and CBS News senior business and Tech Correspondent jooling Kent is in our Los Angeles Bureau um Jill I'm going to Start with you talk to us about why it's Unlikely that the FED will once again uh Decide to leave do a lot of nothing They're exchanging recipes don't worry About them uh you know what inflation is Not coming down to where the FED wants It to be or where any of us would want It to be and we're not just talking About the overall level of prices when We talk about inflation remember it's The pace of increase and we want to see This rate come down towards 2% and right Now it's more like three or three and a Half% depending on the measure so the FED does not need to take any actions Until they get more evidence that the
Inflation rate is coming down and we Have not gotten that yet and let's bring In uh Joe Ling who I learned today goes By the nickname jlk I know this I want To be cool with the kids here so jlk What recent data should we be looking at Is the FED looking at that plays into Today's decision yeah they're looking at All all kinds of data but the main point Here is CPI the Consumer Price Index That's what they're looking for and They're also looking at producer prices Uh they're also looking at other types Of measures in terms of rent inflation Uh but we do know that the Federal Reserve now is going to leave interest Rates unchanged there's site they're Citing a lack of further progress on Inflation so they're going to be holding Interest rates according to the press Release from the Federal Reserve they Basically say that they don't see the Progress on inflation down moving Downwards towards that 2% Target and They see risks to achieving a dual Mandate and they've got to move Continually down towards that 2% Target That they have cited many many times That Jill and I have been looking at for A long time now but another hold to the Disappointment of a lot of people who Were trying to enter the housing market To get lower rates on their credit cards And to get car loans guys
Um Jill what does this mean it's as Predicted rates hold steady but you know Everyone's feeling the persistent cost Of higher rates this past year so what Does this mean for the near term so like Jlk just said if you're borrowing money It's a bummer it's just a bummer and if You're financing an outstanding credit Card balance it's really bad news but I Want to flip it if you're not a borrower Maybe you're a saver and in that case It's amazing news because you can go out And get a CD for 3 months 6 months 12 Months 18 months and you can park your Money in a money market account or a High yield savings account and you can Earn four or 5% interest so while this Is not great news if you're a borrower It is really good news if you're a saver You get to keep more money and earn more Interest and I think this is actually Helping a lot of people be feel able to Spend a little bit more because if You've got money that's making money Even if prices are higher you're like Well the money in my emergency Reserve Fund is making money and it gives you a Little more confidence well we certainly See that people continue to spend that's Part of the reason why the FED made the Decision that they did today so jooling Let's talk about what we might see later In the year because we were expecting That possibly this may meeting would be
The beginning of cuts now we're even Hearing maybe there won't be Cuts uh or Maybe there could be a little uptick in Interest rates what are you thinking is Going to happen over the course of the Rest of the year economists have largely Been expecting the first cut to come at The June meeting we knew that may was Highly unlikely but now given these Inflation rates that have basically been Stuck for three months at this elevated Level June is a huge question mark And In June we'll also get a forecast from The FED in terms of what the economic Outlook from their perspective is and so That's important for consumers to look At and see what could be coming down the Pike but three interest rate Cuts this Year basically off the table a lot of The market is basically saying we don't Expect a June rate cut given the current Situation and looking at the press Release it's essentially holding until Further notice is kind of the vibe that We're getting from the fomc and so Looking ahead maybe a cut in September The issue there as Jill and I have been Talking about is that there's a worry That the Federal Reserve is concerned That they may appear political in nature They try to keep it separated like Church and state in terms of rate Cutting and general election coming up In November so we'll see there's a
Possibility for December as well but a Lot of this is writing on what the data Tells the fed and what it tells chair Powell what does it indicate and right Now it does not indicate that inflation Is going down so we've actually heard Some chatter from one of the FED Governors Bowman saying maybe we should Consider a rate hike but that is very Much the minority opinion at this point I think from the folks I've been talking To on the Wall Street side it it seems Like a very unlikely minority held Opinion at this point but there's a Question of are these higher rates doing Enough to bring down inflation so if a Rate cut and it seems like you're both On the same page with saying that's kind Of off the table for the short term this Year you know rates holding steady as They are is the best case scenario what Does that mean to viewers as far as the Financial decisions they may be making Throughout the rest of the year jlk Mentioned that housing Still Remains one Of the highest costs in areas of Inflation so what does this mean for how We decide to navigate our money you know In the beginning of the year was Interesting because we were expecting Better progress on the inflation rate And as a result we saw mortgage rates Starting to drop down a little bit below 7% and that was kind of like a like oh
Yeah like it's moving in the right Direction now with this resumption of The fear that all of a sudden the fed's Not going to cut rates what do we have We have mortgage rates creeping higher So I think there's again a double-edged Sword I always think about in the Economy there's often winners and losers The winners are all those people who Bought their homes and locked in those Rates and those folks are so Psy you Know 60% of the people who actually have Outstanding mortgages those mortgages Are below 4% so that's actually a problem if You're thinking about the housing market Because why would I list my house if I Have a 3% or a two and a qu% mortgage so I think there's a real problem for the New people entering the market it Becomes more and more difficult I think A lot of people are forced to use Different kinds of mortgage products the Kinds where they would have to refinance But it's not the worst thing in the World just like take a deep breath for One second I know that we're talking About the rest of the year but we have Come from these horribly High inflation Rates we're down at this three something Level and we are going to get back to a More normal pace of inflation it just May not happen as quickly as we'd like So again if the real reason that rates
Are high is because inflation remains Higher than we want then we want rates To stay high we do want that inflation Rate to come down and if you're making Financial decisions you're not making a Six-month decision anyway you're Hopefully making a six-year a 16-year or A 36-year decision yeah but we do know That Americans are carrying more credit Card debt uh and and jooling with the April jobs report coming out on Friday What are you expecting to see about Where the labor market stands because Obviously the hot labor market has Helped to fuel all of the consum Purchasing that's continued this Inflation uh to be unabated despite some Of the fed's actions well first of all Amen to everything Jill just said as She's completely on the mark as usual And just has it all covered and I just Want to say that in terms of the jobs Report we expect a strong jobs report Depends on who you ask in terms of like What the numbers are actually going to Be unemployment is expected to stay Relatively stable and so the the Discussion here is if the jobs Market Remains as healthy and robust as it is What does that tell the Federal Reserve In terms of their decisionmaking and if It continues a pace we're also going to Be looking at what the revisions are if There's any changes to the prior month
And the month before looking at back Earlier in this year but that jobs data Is critical to the decision that the FED Will make but nothing is as important as The rate of inflation and in terms of The housing market I think what's also So frustrating for people is in addition What Joel said with mortgage rates Creeping up higher it's it's hard to get In too because Supply remains so tight As a result and prices just continue to Go up it's the affordability it's a Double whammy guys right right all right Joe Ling Jill thank you both yes thanks Guys
