#USHouseMarketStructureDraft

### **Economic Context & Fed’s Stance**

1. **Inflation & Labor Market**:

- Inflation remains above the Fed’s 2% target (core PCE at 2.6% as of March 2025), but the labor market is robust (unemployment at 4.1–4.2%) .

- Fed Chair Jerome Powell has emphasized a data-dependent approach, noting that policymakers need more clarity on tariff impacts before acting .

2. **Tariffs & Economic Uncertainty**:

- Recent U.S. tariffs have introduced volatility, with potential effects on inflation and growth. The Fed is cautious about reacting prematurely, as tariff-driven price increases could persist .

- The U.S. economy shrank in Q1 2025, partly due to tariff-related import swings, but this data may be revised .