US Economy and Credit Markets Ended August 24, 2018

Last week ended with Federal Reserve generated news again impacting markets. Mr. Powell spoke at the central bank's annual Jackson Hole retreat where he defended a continued gradual rise in interest rates. Noting that as long as unemployment is low, and inflation stable, he doesn't see a need to accelerate the current path of interest rate increases. As it stands, the minutes of the Federal Open Market Committee dated July 31-August 1st noted no change to existing policy but markets nearly unanimously expect an interest rate increase during the Sept. 25-26 meeting. In its notes, the committee expects further gradual increases in the target range for the federal funds rate guiding to a 2 percent inflation objective over the medium term. The committee commented that the current monetary policy remains accommodative and supports "strong labor market conditions and a sustained return to 2 percent inflation." Last week's economic data saw existing home sales decline in July, new single-family home sales decline in July and new orders for durable goods decline for the previous month as well. Major economic reports (related consensus forecasts, prior data) for the upcoming week include: Tuesday: July preliminary month-over-month Wholesale Inventories, August Conference Board Consumer Confidence (126.5, 127.4); Wednesday: prior week MBA Mortgage Applications (N/A, 4.2%), 2Q SAAR GDP Annualized QoQ (4.0%, 4.1%); Thursday: July Personal Income (0.4%, 0.4%), July Personal Spending (0.4%, 0.4%) and prior week Initial Jobless Claims (215K, 210K); Friday: August Chicago Purchasing Manager (63.0. 65.5) and August final University of Michigan Sentiment (95.5, 93.3).
Posted on Monday, August 27, 2018 @ 8:24 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.