A Bit More Pessimistic, A Lot More Realistic
The Federal Open Market Committee increased the target rate by 75 basis points to a 3.25% upper bound and delivered a more pessimistic outlook in their published summary.
The Federal Open Market Committee increased the target rate by 75 basis points to a 3.25% upper bound and delivered a more pessimistic outlook in their published summary.
Inflation remains the primary concern and for now, the Fed is willing to sacrifice economic growth to get inflation back closer to 2%.
Existing home sales in July fell over 20% from a year ago to an annualized rate of 4.81 million. Outside of the onset of the pandemic, the July sales rate was the lowest since late 2015 when the real estate market was recovering from the Great Financial Crisis.
The Federal Reserve concluded its two day policy meeting yesterday and announced it was raising its benchmark rate by 0.75%. Here are four observations about yesterday’s rate hike.
The latest personal income and spending data from the Bureau of Economic Analysis show that part of the driver of spending growth in April was from savings.
The Fed is equipped with blunt instruments – like a hammer – to address their dual mandates of price stability and full employment through various means. The Fed does not have a precision tool – like a screwdriver – to control supply chains.
U.S. stocks are trading at more expensive valuations than their international counterparts, as they have been for quite some time. However, the chart below illustrates the continued earnings superiority of the U.S. equity market.
A slight moderation in inflation will likely provide some needed boost in consumer confidence but we may have to wait another month. The April inflation report was not as soft as many hoped.
Inflation continues to soar, dominating conversation and stretching consumer wallets, but we do see some potentially good signs. Here are three reasons inflation could be near a peak.
Inflation in March was mostly driven by categories already reverting in April. Still, the cool down period could be painfully slow. Here are the categories that will likely lead the way.