US Economy and Credit Markets Ended June 14, 2019

Bob Carey
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US Economy and Credit Markets Ended June 14, 2019

Posted Under: Weekly Market Commentary

The Treasury rally slowed last week while consumer inflation expectations hit record lows. The Consumer Price Index excluding food and energy rose 2.0% in May over a year ago and 0.1% from the prior month, the Labor Department said Wednesday. Both readings came in slightly below expectations and bolstered bets that the Fed will cut interest rates this year, despite the yearly gain coming in at the Fed's 2% target. Additionally, a survey by the University of Michigan released on Friday said consumers expect an average long-term inflation rate of 2.2%, the lowest rate ever recorded by the survey. The release sent yields lower. Meanwhile, retail sales rose 0.5% in May over the prior month and were revised upward from a 0.2% decline in April to a 0.3% gain. The report, paired with stronger-than-expected industrial production, paused the recent rally in Treasurys and sent yields slightly higher. This week, the Federal Open Market Committee meets on Tuesday and Wednesday and is expected to hold rates steady. However, expectations that the Fed will cut rates this year rise significantly thereafter. Major economic reports (related consensus forecasts, prior data) for the upcoming week include Monday: June Empire Manufacturing (10.5, 17.8); Tuesday: May Housing Starts (1,239k, 1,235k); Wednesday: June 19 FOMC Rate Decision – Upper Bound (2.50%, 2.50%), June 14 MBA Mortgage Applications (N/A, 26.8%); Thursday: June 15 Initial Jobless Claims (220k, 222k), May Leading Index (0.1%, 0.2%); Friday: June Preliminary Markit US Manufacturing PMI (50.5, 50.5), May Existing Home Sales (5.25m, 5.19m).

Posted on Monday, June 17, 2019 @ 8:11 AM • Post Link	Share:
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These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.

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