United States: First glimpse points to July activity remaining firm

Wells Fargo Research Team Wells Fargo

Summary

United States: First glimpse points to July activity remaining firm

Following last week's data, which brought some encouraging updates showing ongoing strong growth and easing inflation, this week continued with the first look at key July indicators, including more evidence that the labor market continues to gradually cool.
Next week: Consumer Credit (Mon.), NFIB Small Business Optimism (Tues.), CPI (Thu.)

International: Central bank bonanza

This week, multiple central banks met to assess monetary policy. Policymakers across the G10 and emerging markets gathered to discuss economic conditions as well as set interest rates. Results varied as select institutions opted for additional tightening, some held monetary policy settings steady, while others opted for interest rate cuts.
Next week: China Activity Data (Mon.-Fri.), Reserve Bank of India (Thu.), Central Bank of Mexico (Thu.)

Credit market insights: A sweltering summer for credit markets

Credit markets are feeling the heat. The quarterly SLOOS report released on Monday detailed tightened lending standards and gradually weakening loan demand during the second quarter. The report shows that as credit has gotten expensive, consumers have pulled back on borrowing and lenders' risk appetites have dimmed. In addition, the Small Business Administration implemented a lending policy overhaul this week that aims to widen small business' access to credit.

Topic of the week: Down but not out

Fitch Ratings downgraded the United States’ long-standing credit rating from the top rating of “AAA” to “AA+.” This is only the second time in U.S. history that a credit rating agency has downgraded the country’s sovereign credit rating. Such a move raises concerns over an increase of the federal government’s borrowing costs.

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Wells Fargo Research Team

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