AI Scams – cyber executive fraud has been around for a while. Typically, an employee is tricked into wiring large sums of money into a scammer’s bank account. Often these requests are for ‘special projects’ and involve urgency. The average value of these scams was $100,000 but the stakes are getting higher and sneakier. At a multinational company an employee received an email request from the CFO to wire funds to an external account. The employee found the request suspicious, so the CFO asked the employee to join a video conference with other employees and repeated the wire request. After the video conference the employee wired out approximately $25M. Turns out the CFO and other employees were all AI generated and being duped by a hacker who generated the video images from previous conference recordings.
Mortgage Rates ended the week near where they started after the price of Mortgaged Backed Securities fluctuated. Mortgage rates continue to trend upwards and are up about 0.75% from this time last year.
Inflation – the Personal Consumption Expenditures (PCE), the Fed’s favorite measure of inflation, showed inflation rose 0.3% for the month and is up from 2.5% to 2.7% year over year. The core rate strips out food and energy prices, which the Fed focuses on, and it remained at 2.8% year over year. Income increased 0.5% last month and spending rose 0.8%. Consumers continue to spend beyond their means and the savings rate is down to 3.2%, the lowest since October 2022. Ultimately these numbers will not galvanize the Fed into lowering interest rates.
Loan Performance – Core Logic released their Loan Performance Insights for February, and it showed that only 2.8% of loans are 30 days past due which is an improvement of 0.2% from the previous report. Those who are seriously delinquent (90+ days past due) declined nicely from 1.2% to 0.9. Equity remains strong and only 0.3% of loans are in foreclosure – near historic lows.
Q1 GDP – the first reading of Q1 GDP showed the US economy grew by 1.6% much lower than expectations. Growth was primarily fueled by consumer spending. Spending on services increased the most particularly in health care, and insurance. The price of some goods did decline including, vehicle parts, and gasoline.
Mortgage Applications to purchase homes decreased 1% last week and are down 15% year over year. Refinances fell 6% last week and are up 3% from last year.