Core Viewpoint - The stable expectations allow the Federal Reserve to respond flexibly to changes in the labor market [1] Summary by Relevant Categories - **Federal Reserve's Approach** - The Federal Reserve, represented by Musalem, emphasizes the importance of stable expectations in enabling a flexible response to labor market fluctuations [1]

Group 1 - The core point of the article highlights a significant decline in new single-family home sales in the U.S., with a month-over-month drop of 13.7%, marking the largest decrease in nearly three years, and an annualized sales rate of 623,000 units, the lowest since October 2023 [1][3] - The decline in sales is attributed to high interest rates, with the 30-year fixed mortgage rate hovering around 7%, leading to increased monthly payment pressures for first-time homebuyers and a reduction in their borrowing capacity [3] - Rising construction costs due to tariffs on materials and labor shortages are further exacerbating the affordability crisis, making it difficult for buyers to enter the market despite increased inventory [3][4] Group 2 - The labor market's changes are impacting buyer sentiment, with a slowdown in hiring across various sectors and recent layoffs causing households to adopt a more conservative outlook on future income stability [3] - The Federal Reserve has not indicated a clear path for interest rate cuts, with inflation data not yet returning to the 2% target, suggesting that high interest rates may persist until the end of the year [4] - The decline in new home sales could negatively affect other macroeconomic indicators such as building permits, new housing starts, and housing-related consumer spending, potentially weakening the foundation of the U.S. economic recovery [4]

Core Viewpoint - The changes in the labor market align with the Bank of England's predictions made in May [1] Group 1 - The Deputy Governor of the Bank of England, Lambardelli, emphasized that the current labor market dynamics are consistent with the central bank's earlier forecasts [1]