STEADY INFLATION

According to the Labor Department report released on Wednesday, the Consumer Price Index (CPI) in the U.S. held steady in May, showing no increase and suggesting a slight easing of inflationary pressures on the economy. The CPI, which is a key measure of inflation that tracks the costs of a basket of goods and services across the country, remained flat for the month but rose by 3.3% from a year ago, as reported by the Bureau of Labor Statistics. Economists had anticipated a slight monthly increase of 0.1% and an annual rate of 3.4%, but the actual figures were slightly lower. Excluding volatile food and energy prices, the core CPI increased by 0.2% on a monthly basis and by 3.4% annually. This results came in as a surprise, however, it is worth noting that despite the overall lower inflation numbers, housing costs still continued to rise, particularly in the shelter category.

MORTGAGE SURGE

Based on the latest report from the Mortgage Bankers Association (MBA), mortgage rates dropped last week, leading to a surge in total mortgage applications. The MBA reported that total mortgage application volume increased by nearly 16% compared to the prior week, with refinancing applications increasing by 28% and home purchase loan applications rising by 9%. Meanwhile, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances decreased to 7.02% from 7.07% during this period. However, it is worth noting that those rates rose again after it was revealed last Friday that there was a strong employment for May. Moreover, although there has been improvement on inventory when we compare itto last year, high interest rates and home prices are still challenges for buyers. Nonetheless, as of now, current mortgage rates are stable.

PUSHING FOR DOMINANCE

Republican presidential candidate Donald Trump recently advocated for all remaining bitcoin production to be relocated to the U.S., stating that it would enhance the country’s energy dominance. In a late-night post on the social media platform Truth Social, Trump emphasized the importance of this move, suggesting that it could serve as a defense against central bank digital currencies, a concept he opposes. He criticized President Biden for his stance on bitcoin, arguing that it benefits China, Russia, and the Radical Communist Left. Trump’s call for increasing domestic bitcoin mining underscores his preference for U.S. companies utilizing local resources for production. Notably, global bitcoin mining hotspots currently include China, Central Asia, El Salvador, and some European countries like Germany. During a meeting with executives from CleanSpark Inc. and Riot Platforms, Trump highlighted the role of miners in stabilizing the energy grid. With bitcoin’s total supply capped at 21 million, Trump’s push for American production comes as 90% of the cryptocurrency’s supply has already been mined, with the final coins expected to be mined by 2140.

EV TAX CREDIT

The U.S. government has recently introduced a new program providing more than $1 billion in tax credits to encourage individuals to purchase electric vehicles (EVs). Under the Inflation Reduction Act, car dealers now have the ability to offer immediate tax credits of up to $7,500 for new EVs and $4,000 for used EVs at the point of sale. This change, which took allows buyers to receive the tax credit upfront, even if they do not owe federal taxes. The goal of this initiative is to help make EVs more affordable and competitive with traditional gasoline-powered vehicles, supporting the Biden administration’s efforts to reduce greenhouse gas emissions. However, not all EV models qualify for the tax credit, as they must meet specific manufacturing standards. In addition, there are eligibility limits based on income and the price of the EV.

INTERNATIONAL NEWS

China’s central bank has put a pause on its gold purchases as prices for the precious metal have surged to record highs. The halt comes after an 18-month streak of consistent buying, with May showing no change in the bank’s gold holdings. The spike in gold prices, up 11% so far this year due to escalating geopolitical tensions, has prompted the People’s Bank of China to take a break from acquiring more of the asset; and analysts have stated that this move has left the gold market vulnerable to potential downward pressure moving forward. This is because with China’s central bank being the largest gold purchaser worldwide, its decision to halt buying could signal a shift in the global gold market and potentially impact prices and demand for the precious metal. As of now the current spot price for gold stands at around $2,300 per ounce, slightly down from its peak of nearly $2,450 per ounce in May.