Federal Reserve Chair Jerome Powell said the central bank is taking a more cautious approach to the effects of President Trump’s tariff increases than it did in 2019 because recent increases in tariff rates are much larger and because the economy is coming off a period of much higher inflation.

President Trump’s exasperation over the Fed’s take-it-slow approach to cutting interest rates is prompting him to consider accelerating when he will announce his pick to succeed Powell, whose term runs for another 11 months.

And the U.S. took a step toward easing some of the requirements placed on banks in the wake of the 2008-09 financial crisis, issuing a proposal that would let the largest lenders free up some of the capital they hold for times of market turmoil.

In recent weeks, the president has toyed with the idea of selecting and announcing Federal Reserve's Chair Jerome Powell’s replacement by September or October, according to people familiar with the matter. One of these people said the president’s ire toward Powell could prompt an even-earlier announcement sometime this summer.

Trump is considering former Fed governor Kevin Warsh and National Economic Council director Kevin Hassett, according to people familiar with the matter. Treasury Secretary Scott Bessent is being pitched to Trump by allies of both men as a potential candidate, some of these people said. Other contenders include former World Bank President David Malpass and Fed governor Christopher Waller.

Sales of new homes sank in May amid continued concerns over high mortgage costs. Sales of new single-family homes fell 13.7% to 623,000 from a downwardly revised 722,000 in April. Sales had been expected to come in at 695,000, according to economists polled by The Wall Street Journal.

The Federal Reserve’s board voted 5-2 on Wednesday to issue a proposal to lower the enhanced supplementary leverage ratio. The enhanced ratio dictates how much capital big banks like JPMorgan Chase and Citigroup must hold against their total assets.

Banks have long lobbied for lowering the ratio, and Treasury Secretary Bessent has said the proposal to lower the ratio would help buttress global markets by allowing banks to buy more Treasurys.

8:30 a.m.: Chicago Fed National Activity Index
8:30 a.m.: Advance Report on Durable Goods
8:30 a.m.: Advance Economic Indicators Report
8:30 a.m.: Revised Corporate Profits
8:30 a.m.: 3rd estimate GDP
8:30 a.m.: Unemployment Insurance Weekly Claims Report, Initial Claims
8:45 a.m.: Federal Reserve Bank of Richmond President Thomas Barkin speaks at New York Association for Business Economics event
10 a.m.: Pending Home Sales Index
11 a.m.: Federal Reserve Bank of Kansas City Survey of Tenth District Manufacturing
2 p.m.: U.S. Securities and Exchange Commission Closed Meeting
4:30 p.m.: Foreign Central Bank Holdings
4:30 p.m.: Federal Discount Window Borrowings
7 p.m.: Federal Reserve Bank of Minneapolis President Neel Kashkari participates in Montana Chamber of Commerce event

8:30 a.m.: Personal Income and Outlays
10 a.m.: State Quarterly Personal Income
10 a.m.: University of Michigan Survey of Consumers, Final
10 a.m.: GDP by State
3 p.m.: Agricultural Prices
4:30 p.m.: Federal Reserve Board releases annual bank stress test results

In today's major housing markets, affordability isn't just strained, it's nearly extinct, a report from Realtor.com says. The typical U.S. household would need to spend 44.6% of their income to afford a median-priced home in May, well above the recommended 30% threshold. High mortgage rates and home prices continue to weigh on affordability. Earnings have risen, but homebuying costs have risen faster, Realtor.com says. Using a standard 20% down payment and May's average mortgage rate of 6.82%, just three major metros allow median-income earners to purchase a median-priced home without exceeding 30% of their income: Pittsburgh, Detroit and St. Louis. These metros remain attractive to both buyers and investors due to their relatively low home prices, but sustained demand for low-priced homes threatens to erode affordability even in these strongholds.  — Chris Wack

• U.S. crude oil inventories fell more than expected last week as exports increased, and gasoline stocks declined amid a seasonal pickup in demand, according to data released Thursday by the U.S. Energy Information Administration.
• Higher energy prices as a result of conflict in the Middle East might weaken eurozone economic growth and thus have a damping effect on inflation, the European Central Bank’s vice president said Thursday.
• German consumer sentiment edged lower for the first time in four months as households opted to boost savings, despite greater optimism surrounding their income prospects.
• Muzinich & Co. appointed former Swiss National Bank chair Thomas Jordan as senior adviser, bringing in a monetary policymaker’s perspective to inform its public and private credit strategies, the asset management company said Wednesday. 
• Two weeks after China promised the U.S. it would ease the exports of rare-earth magnets, Chinese authorities are dragging out approval of Western companies’ requests for the critical components, a situation that could reignite trade tensions between Washington and Beijing.

WSJ Pro Central Banking brings you central banking news, analysis and insights from WSJ’s global team of reporters and editors. This newsletter was compiled by news associate Roshan Fernandez in New York. Send your tips, suggestions and feedback to roshan.fernandez@wsj.com.