US Economy and Credit Markets Ended June 15, 2018

The Federal Reserve raised interest rates 25bps last week, but more focus seemed to be on the newfound frankness of the Chairman. He noted the "economy is doing very well" and that "there's a lot to like" about low unemployment. Such phrases are not in keeping with his predecessor who favored longer press conferences and more nuanced communication.  Mr. Powell also announced there will be a press conference following each meeting beginning in 2019, vs. the traditional schedule of one per quarter. This may be indicative of increased desire to have more flexibility regarding potential rate changes on a going forward basis. The Federal Reserve is projecting two more rate increases for the remainder of this year. On Thursday, Mr. Draghi of the European Central Bank announced that the ECB would halt bond purchases but keep interest rates unchanged at current record lows through at least summer of 2019. He declared the ECB has made "substantial" progress regarding inflation and that the euro-area economy is in a better situation but facing increased uncertainty. Major economic reports (related consensus forecasts, prior data) for the upcoming week include: Tuesday: May housing starts; Wednesday: May existing home sales (5.54M, 5.46M) and June 15 MBA mortgage applications; Thursday: May Leading Index (0.4%, 0.4%) and June 16 initial jobless claims (222K, 218K); Friday: June preliminary Markit US Manufacturing PMI (56.3, 56.4).
Posted on Monday, June 18, 2018 @ 8:37 AM

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.