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Sara Eisen (1:06)

Good Thursday morning. Welcome to Squawk on the Street. I'm Sara Eisen with Carl Quintanilla and David Faber. We are live at Post9, as always, from the New York Stock Exchange. Ahead this hour, the latest read on inflation comes in mostly in line, but some interesting data points below the surface giving clues about the state of the economy. We'll talk to Mark Zandi from Moody's for his read on the print. Plus, much more on this wild AI par hour new for Snowflake, up more than 36% now on the back of results. And speaking of AI, we'll talk to the CEO of $100 billion chip design firm and Nvidia partner Synopsis following earnings last night.

Carl Quintanilla (1:41)

First of all, let's get some new homes with Diana Olek. Hey, Diana.

Diana Olick (1:45)

So we have a disappoint on new home sales in April. It came in at 622,000 annualized units. That is well below expectations of 663 It's down 6.2% from March, down 11% year over year. The median sale price was 8% above March. And it was 2.2% above April 2025 That is a price of $413,600.

Now, this count is based on signed contracts. So it's people out shopping in April. You remember mortgage rates shot up in March, then came down a little bit in April. And that's why I think the street was expecting a smaller drop. It was only expecting 2% drop, but now it's seeing that again, 6% drop. The builders, they were nervous. April starts were down 9% month to month, over 2% year over year for housing starts in single family. So again, it's this mortgage rate kind of back and forth of we shoot up, we come back a little, we're obviously up again in the last couple of weeks. But new home sales, to see the price that was actually up a little bit, the builders had been lowering prices to try to get people in the door. So seeing prices up is not great for the market. Again, the big builders can do incentives, other builders cannot. But again, a pretty big disappoint in new home sales for April. Back to you guys.

Sara Eisen (3:01)

Okay. Thank you, Diana. Diana Olek, adding to a pile up of data today. Inflation obviously is the big one because this is the Fed's preferred gauge or at least the Fed right now. That might change under the new Fed chair, Kevin Warsh. The headline on PCE is not as bad as Feared, not as bad as March, but still we've got a little hot inflation problem going on. Here's the year over year number. That's the one that will get the headline. If you round up, 3.8 percent in April and that's the highest since May 2023 in terms of the jump in prices. We knew it was going to be high because of the oil prices and what's been going on with inflation. But the month over month numbers at 0.4 percent was a little lighter than estimates at 0.5 percent and again down from March. Look at Core, right? Strip out food and energy if you want to know what's really going on. And there's a problem there too.

It was better than expected at 0.2 on the monthly, but the yearly number at 3.3 percent is the biggest increase since November 2023 And that's what's going to get the headline and that's going to get the attention and the concern from the Fed. We know according to Fed commentary, the minutes from the last Fed meeting, increasing number of Fed members and voters are worried about the direction of inflation. It is going away from the 2 percent target, not toward the 2 percent target. But I think they're going to have a real debate about whether, if they hike rates, if that's going to be damaging to the economy overall, because there were some other clues in the data.