Good Friday, AM from your Hometown Lender,

The week finishes with some important data.

• Personal Income -0.4 vs 0.3
• Personal Spending -0.1 vs 0.1
• PCE MOM 0.1 vs 0.1
• Core PCE MOM 0.2 vs 0.1

I am sure you are looking at it as I am, pretty much in line.

Income is lower, and inflation is a tad higher. It is keeping the bond market basically flat on the day. Equities are roaring higher, and the S&P hit an all-time high. A trade deal with China seems to be moving forward and the pressure on Chairman Powell to cut rates continues to mount. The longer he waits to cut, the more petulant he appears and the less effective he will be. The markets are already pricing around the Fed, knowing that lower rates are coming. Where the Fed is now is much less important than it was 30 days ago.

To add on the need to cut rates, and I am not ringing an emergency bell, but it is worth noting:

• Mortgages led all credit categories for increases in early- and mid-stage delinquencies in May 2025, according to the new CreditGauge published Thursday by VantageScore.
• According to Steve Hanke, Professor of Applied Economics at Johns Hopkins University, persistent drops in the money supply—which has historically been a good indicator of economic weakness—are a serious warning sign. He clarified that while the consequences of monetary contraction manifest themselves with “long and variable lags,” the end result is typically the same: a decline in economic activity.

You heard it here first folks; I expect rates to be in the 5’s by the end of the year.

Stay safe, enjoy the weekend, and first, make today great!!!

Stay safe, enjoy the weekend, and first, make today great!