-Janet Yellen, Fed Chairwoman
Sales of new US single-family homes declined less than expected in January, while supply increased to the highest level since 2010. The Commerce Department reported that sales slid 0.2% to a seasonally adjusted annual rate of 481,000 units. December's sales were revised up to 482,000 units, the highest level since June 2008, from 481,000 units. Analysts, however, had expected a pullback to 471,000 units. Compared to the same period last year, sales rose 5.3%. Activity in the housing sector has remained sluggish since hitting a speed bump in the second half of 2013 as limited home inventories and higher prices put off first-time buyers, against the backdrop of weak wage growth. It has hindered the overall economy, even though mortgage rates have dropped dramatically from their 2013 peaks. Recent data also showed a plunge in existing home sales in January and softer single-family housing starts and permits.
In the meantime, Fed Chair Janet Yellen wrapped up her two-day testimony to Congress. On Wednesday, Yellen said that the Fed could hike interest rates before inflation rises as long as the central bank sees price growth accelerating and the labour market continues to improve. Yellen said the Fed wanted to see inflation moving toward its annual 2% goal "over the medium term" before raising rates. Fed Chairwoman repeated forecasts that inflation will rise 1.7%-2% by the end of 2016.
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