Female Executives Increase Innovation, Inflation & Jobs Update

There have been a lot of studies showing that companies with female leaders out perform their peers particularly in the metrics of: social responsibility, customer service, and profitability. Recently a study by Corinne Post gets into the why. She found that female appointments into top management teams decreases risk taking by 13.5%. A the same time these teams’ tendency to experiment increased by 10.2% Remember that innovation and experimentation isn’t inertly risky and that certain ingrained company behaviors can be quite risky. These numbers improved significantly when there is a female incumbent.

Mortgage Rates improved very slightly this week as the price of Mortgage Backed Securities made a positive move again, keeping above their 3 month negative trading pattern. Rates are up approximately 2.125% from this time last year.

Jobs – The number of people filing for unemployment for the first time leveled off this week after bumping up over the last month. This will continue to be an important indicator moving forward as it is still in an upward trajectory and considered a bell weather for recession.

Home Sales – singed contracts on existing homes fell 3.9% in April and are down 9.1% year over year. Interest rates are impacting demand but volume is still strong coming off an extremely hot 2021 with significantly higher prices, lower inventory, and higher rates.

Inflation – the Fed’s favorite measure of inflation – the PCE – showed the headline number increased by 0.2% from last month and is up 6.3% year over year. If you look at the core rate (less energy and food), which the Fed cares most about, inflation is up 4.9% year over year which is down from 5.2% last month. There is an approximate 2% spread between the PCE and the Consumer Price Index (CPI) and the main reason is because the CPI places a higher emphasis on shelter and out of pocked medical expenses.

The Fed continues to posture towards another 0.50% rate hike in the Fed Funds rate – the overnight lending rate that banks lend to each other at. This will increase the rates on HELOCs, short term loans, and credit cards. Their goal is to bring down inflation to a more ‘neutral rate’ of 2%

Mortgage Applications to purchase homes were neutral from the previous week and are down 16% year over year. Refinances fell 2% last week and are down 75% year over year making up less than 1/3 of transactions.

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