Evelyn Reynolds

Home building in May fell to its slowest pace in four years despite a supply shortage. That trend could put even greater strain on buyers.Construction of new homes in the United States dropped below expectations in May as builders pull back on new residential projects largely in response to high interest rates, reinforcing concerns about stubbornly high housing prices.Government data released on Thursday showed that new-home construction, or housing starts, fell 5.5 percent last month to an annualized rate of 1.28 million, a sign of more cracks in the already shaky housing market. Slower construction of both single-family and multifamily homes contributed to the overall drop. Building permits dipped 3.8 percent, pointing to less future construction.This downturn in home building comes as the average rate on 30-year mortgages, the nation’s most popular home loan, has reached highs not seen in decades, though the rate dipped slightly this week to 6.87 percent, Freddie Mac reported on Thursday.The magnitude of the decrease in construction last month underscores that high interest rates are both weakening housing demand and raising costs for builders — two dynamics that are ultimately contributing to builders’ reluctance to start projects. Home builder sentiment dropped in May to its lowest level this year before falling even further this month, suggesting relatively tepid home construction data in the coming months, Daniel Vielhaber, an economist at Nationwide, said in a statement.The weakening in construction, in turn, is only putting more strain on prospective home buyers.“If you’re a consumer, if you’re someone looking to buy a home, what you ultimately want is a lot more supply,” said Chen Zhao, who leads the housing economics team at the real estate services company Redfin. “The key to having more housing supply is that we need more building. So any time we see that there is less building, that is bad news.”The latest housing construction data, released by the U.S. Census Bureau and the Department of Housing and Urban Development, reinforces that consumers are unlikely to see home prices drop by much over the next couple of years, Ms. Zhao said. The data point, she added, represents “one more factor that would keep home price growth high” because it points to a tighter housing supply in the next year or two.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

The Housing Market Is Weird and Ugly. These 5 Charts Explain Why.Home prices have held up better than expected amid high interest rates. But that doesn’t mean the housing market is healthy. More

Speaking to CNBC’s Karen Tso, IMF Managing Director Kristalina Georgieva said Europe’s economic performance was strengthening and inflation was clearly on a downward trajectory.
“We come with this relatively good news and with a warning: There is no time to waste for the euro zone to concentrate on productivity,” Georgieva said.
“Right now, Europe looks like an ideas supermarket for the United States,” she added.

IMF Managing Director Kristalina Georgieva arrives at a briefing in Washington, D.C., on Friday, April 19, 2024.
Bloomberg | Bloomberg | Getty Images

The head of the International Monetary Fund on Thursday called on Europe to achieve the full potential of its prized single market, lamenting what she described as a situation that makes the region look like “an ideas supermarket” for the U.S.
Speaking to CNBC’s Karen Tso, IMF Managing Director Kristalina Georgieva said Europe’s economic performance was strengthening and inflation was clearly on a downward trajectory.

Georgieva said that the IMF observing an uptick in consumption and expected interest rate cuts from the European Central Bank spelled out good news for investment in the euro zone. She said it would bolster the 20-member bloc’s economic performance.
“We come with this relatively good news and with a warning: There is no time to waste for the euro zone to concentrate on productivity,” Georgieva said.
“That means two things. One, to achieve the full potential of the single market. It is not there yet. We want to see more labor market flexibility in Europe, we want to see [a] deepening [of] the financial markets, integrating them [and] we want to see the banking union, the capital union in place,” she continued.
“And two, we want to see much more attention to innovation, investing in [research and development], making it possible to have business based on innovation in Europe to materialize in Europe. Right now, Europe looks like an ideas supermarket for the United States,” Georgieva said.

“A lot of what is invented here ends up being commercially viable and on scale over there and when you look at the main obstacle? 27 countries not yet integrated in a single market.”

U.S. productivity gap

The European Union’s single market seeks to guarantee the unrestricted movement of goods, capital, services and labor throughout the territory.
Established more than 30 years ago, the single market is designed to allow EU citizens to live and work across the EU and to provide consumers with a wider choice of high-quality services and products.
The IMF believes deeper single-market integration could further boost the region’s economic growth.
In May, the Washington, D.C.-based institute said in a blog post that an IMF report published in 2023 estimated that reducing remaining barriers to the single market for goods and services by 10% could raise European output by as much as 7 percentage points over the long term.
“The euro area is now focusing on critical questions for the future. Among them, number one, how to lift up productivity at par with competitors, especially with the U.S.,” Georgieva said.
The IMF chief reinforced the fund’s growth outlook for the euro zone, saying the bloc was on track to register a growth rate of 0.8% in 2024, compared with 0.4% in 2023 — and increase by 1.5% next year.
Correction: A previous version of this article misstated the month that the IMF said a 10% reduction would boost European output by up to 7 percentage points. More

The Bank of England voted to hold interest rates at its June meeting, meeting market expectations after U.K. inflation fell to the central bank’s 2% target.
Traders saw an increased likelihood it may opt for a cut in August, after it described a “finely balanced” decision that saw policymakers divided on the threat of second-round inflationary pressures.
Ruth Gregory, deputy chief U.K. economist at Capital Economics, said “several developments implied a rate cut is getting closer.”

General view of the Bank Of England building in London. 
Sopa Images | Lightrocket | Getty Images

LONDON — The Bank of England on Thursday opted to keep interest rates steady at its June meeting, but described the decision as “finely balanced” after U.K. inflation hit its 2% target.
Markets nudged bets on an August rate cut up to nearly 50-50 on what investors perceived as subtly dovish messaging.

It keeps the central bank’s key rate at a 16-year high of 5.25%, where it has been held since August 2023.
Seven members of the Monetary Policy Committee voted to hold, while two favored to cut by 25 basis points, the same as during the May meeting.
In a statement, the MPC noted inflation had reached the central bank’s target and said indicators of “short-term inflation expectations” and wage growth had eased.

It was “very difficult to gauge the evolution of labour market activity” because of uncertainty around estimates from the Office for National Statistics, the MPC added.
In a repeat of previous messaging that some analysts had thought it may drop, it again said monetary policy needs to “remain restrictive for sufficiently long to return inflation to the 2% target sustainably.”

Inflation data on Wednesday showed headline price rises cooled to 2% in May, hitting target ahead of the U.S. and the euro zone, despite the U.K. suffering a sharper spike inflation over the last two years.
However, economists say the U.K.’s continued high rates of services and core inflation suggest the potential for ongoing upward pressure.

The central bank’s decision to hold comes just two weeks out from a general election in which the state of the economy and proposals for rebooting sluggish growth have emerged as a key battleground.
Despite speculation that the politically-independent BOE might act more cautiously as a result of the upcoming vote, Governor Andrew Bailey had emphasized that it would remain focused on its own data.

‘Finely balanced’

Attention will now turn to the prospects of an August rate cut. Money market pricing indicated a nearly 50% chance of this following Thursday’s statement, higher than the previous day.
The MPC said that among the seven members who voted to hold, there was disagreement over the level of accumulated evidence that would be required to warrant a cut and that their decision was “finely balanced.”
Some believed that key indicators of inflation persistence “remained elevated,” with particular concern over second-round effects from services, strong domestic demand and wage growth. Others, however, felt hotter-than-expected services inflation in May had not significantly impacted the U.K.’s overall disinflation trajectory.
Ruth Gregory, deputy chief U.K. economist at Capital Economics, said in a note that “several developments implied a rate cut is getting closer,” including the “finely balanced” comment and the fact that the BOE’s overall tone had not become any more hawkish since May.
The chance of a summer interest rate cut is higher than the 30-40% that was previously being priced by markets, according to James Smith, developed markets economist at ING.
“I think the inflation numbers, services inflation… I think the road is still down for that, and I think they’ll [the BoE] remain reasonably confident,” Smith told CNBC’s Silvia Amaro following Thursday’s announcement.
“A bit like the [European Central Bank], I think they’ve got more confidence in their inflation forecasting ability than maybe 6-12 months ago.”
Other central banks in Europe have already begun to ease monetary policy, including the European Central Bank, Swiss National Bank and Sweden’s Riksbank, as they seek to reboot economic growth.
That’s even as the U.S. Federal Reserve, sometimes viewed as the central bank leader due to the U.S.’s outsize influence on the global economy, has left traders pondering when its first rate cut will come. Money market pricing suggests a 65% chance of a September cut, according to LSEG data.
The British pound extended losses against the U.S. dollar, trading 0.3% lower at $1.267 at 1 p.m. in London. More

The Swiss National Bank trimmed its key interest rate by 25 basis points to 1.25% in its second cut of the year.
Two thirds of economists polled by Reuters had anticipated the SNB would decide in favor of a 25-basis-point-cut to 1.25%.
The country’s inflation flatlined at 1.4% in May after a bump up in April and is expected to average the same level across full-year 2024, according to the SNB’s latest projections.

A view of the headquarters of the Swiss National Bank (SNB), before a press conference in Zurich, Switzerland, March 21, 2024. 
Denis Balibouse | Reuters

The Swiss National Bank on Thursday trimmed its key interest rate by 25 basis points to 1.25%, continuing cuts at a time when sentiment over monetary policy easing remains mixed among major economies.
Two thirds of economists polled by Reuters had anticipated the SNB would decide in favor of a 25-basis-point-cut to 1.25%.

The Swiss franc weakened in the wake of the announcement, with the Euro gaining 0.3% and the U.S. dollar up 0.5% against the Swiss currency at 8:55 a.m. London time.
Following the Thursday decision, the Swiss central bank pegged its conditional forecast for inflation at 1.3% for 2024, 1.1% for 2025 and 1.0% for 2026. The figures assumes a SNB interest rate of 1.25% over the prediction period.
The country’s inflation flatlined at 1.4% in May after a bump up in April and is expected to average the same level across full-year 2024, according to the SNB’s latest projections.
The Swiss bank said it now anticipates economic growth of around 1% this year and around 1.5% in 2025, anticipating slight increases in unemployment and small declines in the utilization of production capacity.
“Over the medium term, economic activity should improve gradually, supported by somewhat stronger demand from abroad,” the SNB said.

Speaking to CNBC’s Silvia Amaro, SNB Chair Thomas Jordan stressed the impact that inflationary winds had on the bank’s latest decision-making.
“[We have] inflationary pressures that slightly declined, we have also [a] strong Swiss franc, and we have an increase in uncertainty globally. So, we came to the conclusion that, given those circumstances, it is best to lower rates by 25 basis points,” he said.
While underlining that the SNB’s foremost instrument is its interest rate, Jordan said that the bank is also ready to intervene into the foreign exchange market, if necessary.
“There are big swings in the exchange rate that could have an impact, or, really, big changes in [the] economic outlook of the world economy,” he noted. “The Swiss franc appreciated to some extent, vis-à-vis our last monetary meeting. The exchange rate has an influence on monetary conditions, and we take that into account.”
Jordan confirmed he will attend his last SNB monetary policy meeting in September, before leaving his post that month.

Future steps

Switzerland already has the second-lowest interest rate of the Group of Ten democracies by a wide margin, following Japan. It became the first major economy to cut interest rates back in late March and was earlier this month followed by the European Central Bank, and questions are now mounting over whether it will proceed with a third rate cut this year.
The SNB’s inflation forecast “suggests that there is still some restrictiveness to be squeezed out this year, and for me, that is a heavy signal that another rate cut is coming in September,” said Kyle Chapman, FX markets analyst at Ballinger Group. “I expect the SNB to follow up with a third cut next quarter, and there is potential for a fourth in December if there is still high conviction in the restrictive level of monetary policy.” 
He signaled that this outlook leaves the Swiss franc in a “vulnerable position.”
A Capital Economics analysis note out Thursday disagreed with the view, saying that the SNB is unlikely to proceed with further cuts this year in the current inflationary landscape.
“Looking ahead, we think that the SNB will not cut rates again this year as we are now no longer confident that underlying inflationary pressures are abating because labour compensation is growing at a strong rate and services inflation remains very sticky,” the note said.
Adrien Pichoud, chief economist at Bank Syz, also said that the SNB is “now done with the recalibration of its monetary policy and that it shouldn’t cut rates further this year.”
The U.S. Federal Reserve has yet to blink on interest rate reductions, and market participants will be following later in the Thursday session to see if the Bank of England takes the leap to trim, after U.K. inflation eased to the 2% target for the first time in nearly three years. More

A team of economists recently analyzed 20 years of peer-reviewed research on the social cost of carbon, an estimate of the damage from climate change. They concluded that the average cost, adjusted for improved methods, is substantially higher than even the U.S. government’s most up-to-date figure.That means greenhouse gas emissions, over time, will take a larger toll than regulators are accounting for. As tools for measuring the links between weather patterns and economic output evolve — and the interactions between weather and the economy magnify the costs in unpredictable ways — the damage estimates have only risen.It’s the kind of data that one might expect to set off alarm bells across the financial industry, which closely tracks economic developments that might affect portfolios of stocks and loans. But it was hard to detect even a ripple.In fact, the news from Wall Street lately has mostly been about retreat from climate goals, rather than recommitment. Banks and asset managers are withdrawing from international climate alliances and chafing at their rules. Regional banks are stepping up lending to fossil fuel producers. Sustainable investment funds have sustained crippling outflows, and many have collapsed.So what explains this apparent disconnect? In some cases, it’s a classic prisoner’s dilemma: If firms collectively shift to cleaner energy, a cooler climate benefits everyone more in the future. But in the short term, each firm has an individual incentive to cash in on fossil fuels, making the transition much harder to achieve.And when it comes to avoiding climate damage to their own operations, the financial industry is genuinely struggling to comprehend what a warming future will mean.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

Participants during the snowboarding activity with the Hoods to Woods Foundation at Big Snow American Dream in East Rutherford, New Jersey on June 13, 2024.
Danielle DeVries | CNBC

EAST RUTHERFORD, N.J. — For 16-year-old Zyshawn Gibson, snowboarding down the indoor ski park at Big Snow American Dream in East Rutherford, New Jersey, was a welcome change of scenery.
Gibson’s participation at the ski park was made possible through the Hoods to Woods Foundation, a nonprofit based in New York and New Jersey that “promotes awareness of the outdoors to inner city children through snowboarding,” according to the organization’s website. Through its 15-year history, Hoods to Woods has helped hundreds of underserved youth such as Gibson develop a new interest and outlet through snowboarding, co-founder Omar Diaz estimated.

“It keeps me out of the house,” Gibson told CNBC from a lounge room in the Big Snow complex. “It’s a different thing to do, instead of being outside in the streets and being in danger and stuff like that.”
Hoods to Woods, the brainchild of Diaz and co-founder Brian Paupaw, is dedicated to providing new opportunities for teenagers and young adults who come from similar backgrounds to their own. The group hosts weekslong programs across urban areas in the two states.

Participants during the snowboarding activity with the Hoods to Woods Foundation at Big Snow American Dream in East Rutherford, New Jersey on June 13, 2024. 
Danielle DeVries | CNBC

The organization is just one of several across the United States working to bringing people of color to outdoor activities, including winter sports — spaces where they are often marginalized and underrepresented.
A 2019-2020 participation study released by Snowsports Industries America showed that the participation for white Americans remained at 67.5%. In comparison, Asians accounted for 7.7% of the participants, while Black people made up 9.2% and Hispanics came in at 14%.
Similarly, a demographics study updated by the National Ski Areas Association in 2023 found that white participants represented 88.1% of guests.

One factor that contributes to this divide is the high barrier to entry for these winter sports, given the average expenses when it comes to equipment and transportation. The same study from Snowsports Industries America revealed that more than half of winter sports participants in 2019 through 2020 made over $75,000 a year.

Breaking down barriers

But organizations such as Hoods to Woods have made it their mission to break down these walls.
The nonprofit started in 2009 as an effort from Paupaw and Diaz, two seasoned snowboarders, to give back to their communities by introducing youth to the outdoors through snowboarding.

Co-founder Omar Diaz (right), his son Sebastian (middle) and volunteer Veronica Vogelman pose for a photo during the snowboarding activity with the Hoods To Woods Foundation at Big Snow American Dream in East Rutherford, New Jersey on June 13, 2024.
Danielle DeVries | CNBC

“The representation of people that looked like me and even came from my environment was important, because you could be out on the mountain and you hear people talking but they don’t sound like you,” Diaz said. “You grow up in an urban environment, and in the mountains everyone around you sounds completely different.”
The entire program — including snowboarding lessons, transportation and meals — is free for its youth participants. Paupaw and Diaz raise money to pay for travel and food.
The group also accepts donations of gear or gifts, while Big Snow has lent its facilities at no charge to the nonprofit for years.

Curating communities in the outdoors

Outside of Hoods to Woods, there are other nonprofits in the United States dedicated to similar causes.
For instance, Edge Outdoors in Washington state, aims to “[address] the invisibility of Black, Indigenous, women of color in snow sports,” founder Annette Diggs told CNBC. The group also works to include women who belong to the LGBTQ+ community, including both trans and queer-identifying participants.
“One thing that’s unique about Edge is that we work with the community — a lot of our participants are being taught by people from their community, meaning Black and brown people,” she said.
Ciera Young, who is Black and has multiple sclerosis, learned adaptive skiing through a scholarship from Edge.
“I was just so grateful that my instructors listened to me, and they said, ‘We want to make sure you’re able to ski the way you want to ski and that you feel empowered,'” she said. “Being in a space with other BIPOC folks was incredible.”

Zyshawn Gibson, left, and Tah’gee Van Dunk during the snowboarding activity with the Hoods to Woods Foundation at Big Snow American Dream in East Rutherford, New Jersey on June 13, 2024.
Danielle DeVries | CNBC

Meanwhile, Vermont-based nonprofit Unlikely Riders, created in 2020, is planning to build a people of color-stewarded outdoor community center, which co-founder Abby Crisostomo envisions will one day be a “radically inclusive space.”
In the four years since its founding, Crisostomo estimated that Unlikely Riders has hosted more than 145 events, donated 2,500 pieces of winter gear and instructed more than 570 community members for free. In addition to skiing and snowboarding, the group also introduces people of color and LGBTQ+ communities to mountain biking while fostering a welcoming environment.
Small businesses, such as Skida or the people of color-owned ToughCutie, have been instrumental in championing the efforts of Unlikely Riders by donating gear and hosting events.

Coming full circle

Besides their mission of inclusivity, the co-founders of Hoods to Woods also emphasized the importance of mentorship within the program, including checking in with their community participants and helping with financial literacy, college applications and employment offers.
“I saw kids who had behavioral problems at school and at home, do a 180 because they were able to be in environment where they could be themselves and think freely,” Paupaw said. “To me, that’s one of the most powerful things I’ve witnessed as a human being, but also as a co-founder of this program.”
Through Hoods to Woods, Diaz, Paupaw and their volunteers have built many relationships with their participants. Some come back to volunteer after graduating from their programs.

Participants and volunteers during the snowboarding activity with the Hoods to Woods Foundation at Big Snow American Dream in East Rutherford, New Jersey on June 13, 2024. More than half of the program’s volunteers are certified snowboard instructors, said co-founder Omar Diaz.
Danielle DeVries | CNBC

“This is the perfect combination,” Diaz told CNBC. “Giving back to the youth, changing their lives, doing it in a place that I love — I’m happy. There’s no better way to give back.”
Miquan Chisholm, 27, was one of the program’s first participants 15 years ago. He’s now a dedicated volunteer to the cause. His daughter is just 3 now, but he envisions a future in which she will one day join the community.
“It changed my life because it gave me a different view on life. I never thought that I would be snowboarding as a Black person … And I fell in love with it,” he said. “Hoods to Woods definitely gave me the confidence to try new things and just be open-minded about things in life and realize there’s so many opportunities for people out there.”

Don’t miss these exclusives from CNBC PRO More

U.K. inflation fell to the Bank of England’s target of 2.0% in May, the Office for National Statistics said Wednesday.
The headline reading declined from 2.3% in April, bringing it in line with the central bank’s 2% target.
The print is the last key economic measure ahead of national elections in July.

Shoppers on the high street in the Kingston district of London, U.K.
Bloomberg | Bloomberg | Getty Images

U.K. inflation fell to the Bank of England’s target of 2.0% in May, the Office for National Statistics said Wednesday, in the last print of the key economic measure ahead of national elections in July.
The headline reading declined from 2.3% in April and came in line with the 2% expectations of economists polled by Reuters.

Sterling rose slightly shortly after the release, trading at $1.2721 by 7:33 a.m. London time.
Services inflation — which is closely watched by the BOE given its dominance within the U.K. economy and its reflection of domestically-generated price rises — was at 5.7% in May, versus 5.9% during the previous month.
Core inflation, excluding energy, food, alcohol and tobacco, dipped to 3.5% from 3.9% in April.

Falling food prices were the largest contributor to the declines, while car fuel costs continued to see an upward pressure, the ONS said.
Unseasonably bad weather led to the slowest increase in grocery sales in two years, new figures from U.K. market research firm Kantar showed Tuesday. Grocery sales rose 1.0% in the four weeks to June 9, marking the sixteenth consecutive monthly decline in food inflation, according to the index.

Bank of England decision in focus

While the latest print brings inflation in line with the BOE’s target, Azad Zangana, senior European economist and strategist at Schroders, cautioned that upward pressure could return in the second half of the year, as the U.K. phases out its energy price cap.
“From the third, fourth quarter onwards, you might start to see a bit more upward pressure coming through as the Bank of England has warned,” he told CNBC’s “Squawk Box.”

Zangana suggested that the Bank could even “surprise” the market with a rate cut this week, when it next meets on Thursday. The Bank is otherwise widely expected to hold rates steady at 5.25%, where they have been since August 2023 — back when inflation hovered around 7.9%.
Nevertheless, with inflation falling closer to target, markets are now pricing in a near-term cut. All but two of 65 economists polled by Reuters last week said they expected an interest rate trim in August, while financial markets are pricing in such a curb in September.
Melanie Baker, senior economist at Royal London Asset Management, agreed that an August interest rate cut looks likely, but added that forthcoming data prints would need to show that inflation is down on a sustained basis.
“Services CPI around the 6% mark continues to look inconsistent with being confident that you are going to sustainably hit a 2% inflation target, in my view,” she said in a note.
The economic performance comes as the U.K. gears up for its general election on July 4, with polls pointing to a landslide victory for the opposition Labour party.
U.K. Prime Minister Rishi Sunak dubbed the latest print “great news” in a post on the X social media platform, adding that inflation was now “back to normal.”
Opposition politician Rachel Reeves acknowledged that, while inflation is growing at a slower rate, “the cost of living crisis is still acute” for many families. More