Five Stories Moving the Market
Five Stories Moving the Market:
Federal Reserve Chair Jerome Powell told lawmakers that recent economic data would have likely justified continuing to lower interest rates if not for concerns that higher tariffs might derail the central bank’s yearslong fight to defeat inflation – WSJ. (Why you should care – Powell suggested it’s likely that the central bank will lower rates again in September)
Federal Reserve Bank of New York President John Williams expects slower growth and higher inflation this year due in large part to trade tariffs; he said it's too early to call for lower interest rates given that the inflation threat has not abated – Reuters. (Why you should care – the FOMC Vice Chair said he believes inflation growth could rebound to 3% by year’s end)
Australia’s monthly inflation cooled faster than anticipated in May, moving close to the bottom of the Reserve Bank’s 2-3% target and boosting the case for an interest-rate cut as soon as next month – Bloomberg. (Why you should care – inflation growth continues to ease in most major global economies, supporting the case for central bank rate cuts)
U.S. consumer confidence unexpectedly deteriorated in June as households increasingly worried about job availability, another indication that labor market conditions were softening against the backdrop of rising economic uncertainty due to tariffs – Reuters. (Why you should care – the data indicate the decline is across all age groups and political affiliations, likely leading to a pullback in spending if pessimism persists)
U.S. home prices rose at the slowest annual pace in nearly two years as mortgage prices continued to stretch affordability; the S&P CoreLogic Case-Shiller National Home Price Index, which measures home prices across the country, rose 2.7% in the 12 months to April, the slowest on-year appreciation since mid-2023 – WSJ. (Why you should care – slowing home price growth should act as a major drag on inflation)
Economic Calendar:
BOJ Summary of Opinions
BOJ’s Tamura (Board Member) Speaks
U.S. - MBA Mortgage Applications (7 a.m.)
U.S. - Building Permits for May (8:30 a.m.)
SNB Quarterly Bulletin (9 a.m.)
Fed’s Powell (Chairman) Testifies Before Congress (10 a.m.)
U.S. - New Home Sales for May (10 a.m.)
U.S. - Energy Information Administration Crude Oil Inventory Data (10:30 a.m.)
Treasury Auctions $28 Billion in 2-Year Floating Rate Notes (11:30 a.m.)
Treasury Auctions $70 Billion in 5-Year Notes (1 p.m.)
Wish to thank you for clarity your posts provide.
Fed claims they are data dependent yet when push comes to shove they are going with predicting that tariffs will cause inflation to rise so as to justify their monetary stance. So far that has not been the case as producers are eating bulk of Tariff assessments and falling energy costs are dampening inflationary pressures throughout production and transportation sectors.
My view is that falling energy costs plays a larger and unheralded impact upon why Producers can now claim they are willing to eat Tariffs and not pass them on to consumers.
Guess we will know better come Friday.