Weekly economic & financial commentary
|Summary
United States: The U.S. Economy Continues to Push Through Supply-Side Headwinds
- During May, retail sales pulled back 1.3%, while industrial production rose 0.8%. Housing starts improved 3.6% in May, but the NAHB/Wells Fargo Housing Market Index slipped two points to 81 in June. The PPI for final demand advanced 0.8% in May. The FOMC made no major changes to monetary policy.
- Next week: Existing Home Sales (Tues.), Durable Goods (Thurs.), Personal Income & Spending (Fri.)
International: China's Economy Shows Signs of a Slowdown; Brazilian Central Bank Lifts Rates Again
- This week, Chinese activity indicators revealed the economy is decelerating and the economic outperformance exhibited throughout 2020 may be starting to fade. Also, the Brazilian Central Bank raised policy rates another 75 bps and signaled additional tightening is very likely at its next meeting.
- Next week: Eurozone PMIs (Wednesday), Bank of England (Thursday), Central Bank of Mexico (Thursday)
Interest Rate Watch: The "Dot Plot" Shifts Up
- The Federal Open Market Committee (FOMC) met on June 15-16, and as widely expected, it made no substantive policy changes. But the meeting was consequential because of the signaling that the committee provided through its "dot plot."
Topic of the Week: U.S. and E.U. End Aircraft Dispute to Form United Front Against China
- The 17-year stalemate between the United States and the European Union over aircraft subsidies finally came to an end (at least for now) on Tuesday as both parties decided to suspend related tariffs for the next five years.
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