Welcome to the latest installment of The Full Measure with Kevin Hecht—your destination for the most current economic insights and analyses. Catered to real estate appraisers, agents, and other professionals, this monthly blog series helps you navigate the ever-evolving economic environment so you can make well-informed decisions to support your business and career success. Uncover this month’s economic trends and insights—written from an appraiser’s standpoint—in the following economic recap for June 2023.
Economic recap June 2023
June 2023 was packed with economic updates that real estate appraisers, agents, and other professionals need to digest. The Federal Open Market Committee held its meeting, where projections for real gross domestic product growth, unemployment rate, and inflation were discussed. Additionally, consumer spending forecasts revealed modest growth predictions. Amid all this, the Federal Reserve maintains the federal funds rate, pausing its rate hike cycle for now. Let’s delve deeper into the details and implications of these economic trends.
Inflation
The Consumer Price Index (CPI) inflation, as of May 2023, declined significantly to 4.0% year over year, marking the lowest since March 2021. This deceleration offers some respite to Americans grappling with a two-year inflation run-up. Despite this slowdown, “core” CPI inflation, excluding volatile sectors like food and energy, remains high at 5.3%, down from 6.0% a year ago.
The Fed has forecasted that the Core Personal Consumption Expenditures measure of inflation will not reach its target of 2% until 2025. This projection raises a critical question— will the Fed reconsider its 2% target? Chairman Powell, however, reiterated the Fed’s strong commitment to this goal in his press conference.
Interest rates
In June 2023, the Federal Reserve held rates steady, marking a pause in its rate hike cycle. The Fed’s benchmark federal funds rate currently rests between 1.5% and…