Darla Mercado of CNBC reports that the Federal Reserve held interest rates steady at 4.25%–4.5% last week, signaling a cautious stance amid growing concerns over stagflation and tariff-driven inflation. While the Fed’s projections still include two rate cuts in 2025, Chair Jerome Powell emphasized the central bank is “well positioned to wait,” citing lingering uncertainty and no immediate signs of economic weakness. Powell acknowledged that inflation expectations have ticked up—largely due to tariffs—but warned their full impact is still developing.

Source: Statista (June 2025)

Jeff Cox of CNBC reports that Federal Reserve Governor Christopher Waller is signaling support for a rate cut as early as July. In a CNBC interview, Waller stated that inflation remains subdued and the labor market shows early signs of softening. Waller emphasized that waiting for a downturn before acting would be a mistake: “Move now, don’t wait.” Despite the Fed unanimously voting to hold rates steady at 4.25%–4.5% this week, Waller broke ranks by suggesting immediate easing may be necessary.

Neil Irwin and Courtenay Brown of Axios highlight a notable shift in Fed dynamics as Waller, one of the Fed’s most influential voices, publicly backed a potential rate cut as early as July, marking a break from the central bank’s cautious consensus. Waller emphasized that inflation remains subdued, and recent labor market data, such as high unemployment among recent college grads, signal downside risk. Crucially, Waller pushed back against President Trump’s calls for rate cuts to ease government debt costs, stating the Fed’s role is not to subsidize federal borrowing. “That’s really the job of Congress and the Treasury.”.

Sean Conlon and Chloe Taylor of CNBC report that U.S. Treasury yields edged lower on Friday after Waller signaled a possible interest rate cut as early as July, citing cooling inflation. The 10-year Treasury yield dropped to 4.377%, the 30-year yield dropped to 4.89%, and the 2-year yield fell over 3 basis points to 3.908%. Waller’s dovish comments follow the Fed’s June decision to hold rates steady at 4.25%–4.5%.

Logan Mohtashami of HousingWire reports that President Trump is intensifying pressure on Fed Chair Jerome Powell to cut interest rates, arguing that a 2.5% reduction in the Fed Funds rate could save the U.S. billions in interest payments, particularly helpful as Republicans push the “Big Beautiful Bill.” In a social media post, Trump labeled Powell “Too Late,” underscoring his frustration. However, Mohtashami notes that fiscal politics or debt servicing needs don’t sway the Fed. Instead, he argues the more effective path to influence the Fed is through framing rate cuts as a response to labor market risks, not government savings, since protecting employment is central to the Fed’s mandate.

Steve Liesman of NBC New York reports that stagflation fears are mounting among investors, as the June CNBC Fed Survey reveals expectations for sluggish growth paired with persistent inflation. Despite a slight uptick in projected GDP growth to 1.13%, it’s still well below January forecasts, and inflation pressures remain elevated amid ongoing tariff uncertainty, with 71% of respondents citing concern over trade policy. While the recession probability has dipped to 38% from May’s 53%, it remains notably above early-year levels. Most survey participants anticipate just two rate cuts this year, with the first likely delayed until September, reflecting the Fed’s cautious posture in an increasingly volatile economic landscape.

Multifamily

Kim O’Brien of RealPage reports that apartment demand is outpacing new construction at a historic rate, with 708,000 units absorbed in the year-ending Q1 2025, 3.4x more than the 209,000 units that broke ground during the same period. This marks the highest demand-to-starts ratio since 2010. New construction has dropped for 10 consecutive quarters since peaking at 587,000 units in late 2022, and current starts are well below the decade average of 307,300 units annually, highlighting a significant supply-demand imbalance in the multifamily market.

Source: RealPage (June 2025)

Mary Salmonsen of Multifamily Dive reports that multifamily rents are beginning to recover in high-supply markets, with Western and Sun Belt cities like Austin, Denver, San Francisco, and Dallas posting month-over-month gains in May. The national average rent rose by $6 to $1,761, while year-over-year rent growth remained steady at 1.0%.

Source: MHN (June 2025)

New York City led all metros with 5.7% YOY rent growth, while Austin saw the steepest decline at -5.2%, despite a slight $3 increase in May after a 9.1% rise in supply this year. National occupancy dipped to 94.4%, and single-family rents rose by $3 to $2,183. 

Robert Dietz of the National Association of Home Builders (NAHB) reports that overall housing starts fell 9.8% in May to a seasonally adjusted annual rate of 1.26 million units, driven by a steep 29.7% drop in multifamily construction, which fell to a 332,000-unit pace. Year-to-date, single-family starts are down 7.1%, while multifamily 5+ unit starts are up 14.5%, reflecting strong rental demand amid affordability challenges and high interest rates. As of May, 623,000 single-family homes and 752,000 apartments were under construction, down 1.3% and 4.6% from April, respectively.

New home construction

Logan Mohtashami of HousingWire reports that despite a recent uptick in new home sales, homebuilders remain hesitant to increase permits or starts while mortgage rates hover around 7%. Housing construction peaked in 2022 and has since stalled, with current permitting and start levels resembling those seen during the early COVID-19 recession. Builders have little incentive to ramp up production without a drop in rates.

Danielle Hale of Realtor.com reports that new residential construction activity fell sharply in May 2025, with both permits and starts dropping to five-year lows amid trade war impacts, labor shortages, and builder uncertainty. Total permits declined 2.0% month-over-month and 1.0% year-over-year, driven by significant drops in single-family (-6.4% Y/Y) and low-density multifamily (-7.3% Y/Y) permitting. Total housing starts fell 9.8% from April and 4.6% year-over-year, as high-density multifamily starts plunged 30.4% in May.

Orphe Divounguy of Zillow comments on the data: “Despite lower mortgage rates relative to year-ago levels, builders pumped the brakes on new projects this year. New home sales in April were still higher than in the same period last year. But just like with other sectors, economic uncertainty and a weaker labor market could cause demand to soften. At the same time, resale inventory is at its highest level since July 2020. The increase in sellers listing their properties, combined with a steady supply of newly built homes, has given prospective buyers more bargaining power than in any May since before 2018.”

Robert Dietz of NAHB reports that builder sentiment fell to 32 in June, its third-lowest reading since 2012, reflecting growing pessimism amid high mortgage rates, economic uncertainty, and rising tariffs. According to the NAHB/Wells Fargo Housing Market Index, 37% of builders cut prices in June, the highest share since tracking began in 2022, while 62% used sales incentives. All components of the index declined: current sales dropped to 35, future sales expectations to 40, and buyer traffic to 21, the weakest since November 2023.

Source: NAHB (June 2025)

Elizabeth Thompson and Stephanie Pagan of NAHB report that a new study reveals that the skilled labor shortage in the homebuilding industry costs the U.S. economy over $10.8 billion annually. The study, conducted with the University of Denver, found that longer construction times due to labor gaps directly add $2.66 billion in carrying costs and resulted in roughly 19,000 single-family homes going unbuilt in 2024, an $8.14 billion economic loss.