Good Monday AM,
No news today as markets are coiling up to spring in some direction after Wednesday Fed meeting.
The expectation is still a .25% hike for this meeting but then what? Fingers crossed there will be some hint that the Fed is about done. Despite knowing that rates will be dropping soon, it is not advisable to float into any big news. The Fed meeting counts as big news. I am including the week’s economic calendar below and then two short snippets on the Fed and why employment should ease from here. The question that I continue to ask though is, what happens when rates drop, and the already anemic inventory gets swallowed up by buyers who can now save some money in their payment? I continue to bang the drum of buy the dip although the dip is now defined as today’s price because tomorrow’s price will be higher.
The Conference Board releases its consumer confidence survey for July. Economists expect a reading of 112 for July, up from 109.7 in June.
The Federal Reserve announces its monetary-policy decision. Futures markets peg a 99.8% likelihood of a quarter-percentage-point rate hike, taking the federal-funds rate to a range of 5.25% to 5.5%.
The Commerce Department reports new-home sales for June. Economists expect a seasonally adjusted annual rate of 717,000, down from 763,000 in May.
The Commerce Department releases its first estimate for second-quarter gross-domestic-product growth. Economists forecast a seasonally adjusted annual growth rate of 1.7%, down from 2% in the first quarter.
The Commerce Department reports on durable-goods orders for June. Economists expect a 1.2% increase in orders for long-lasting goods, down from a 1.7% rise in May
The Labor Department reports on initial claims for unemployment benefits for the week ended July 22. Economists expect 236,000 first-time claims, up from 228,000 in the prior week.
The Commerce Department reports the core personal consumption expenditures price index for June. Economists expect a 4.2% increase from a year earlier, down from a 4.6% increase in May.
Uncertainty over the path of inflation makes it hard to predict the Federal Reserve’s next steps following a likely quarter-percentage point increase in interest rates this week. Some Fed policy makers and economists are concerned that the recent easing in inflation will be temporary, and they worry underlying price pressures could persist, requiring the Fed to lift rates higher and hold them there for longer. Other economists say that thinking ignores signs of current economic slowing that will gradually subdue price pressures. WSJ’s Nick Timiraos looks at the ongoing debate over inflation and how that will inform the Fed’s deliberations ahead of Wednesday’s interest-rate announcement.
Americans between 25 and 54 years of age are either employed or looking for jobs at rates not seen in two decades, a trend helping to counter the exodus of older baby boomers from the workforce. Rising participation among so-called prime-age workers is taking a little heat out of the job market and could help the Federal Reserve’s efforts to tamp down inflation by keeping wage growth in check.
Please remain safe and stay healthy, make today great!