Today’s rate cut was viewed by the market as a certainty. The Fed had ample opportunities to set different expectations, but only affirmed the market’s view at every turn. In terms of policy, what mattered more today was the amount of the July cut and the language regarding future cuts. We got a quarter cut—the first cut … Continued

The economy is still growing, thanks primarily to the consumer and an expanding Federal deficit. The first estimate of real GDP growth in the second quarter was 2.1%, which was better than expected but indeed a slowdown from Q1 and last year. Interest rates dropping: Interest rates appear to be heading lower with expectations for 2-3 … Continued

Consumer spending is robust and likely drove much of the second-quarter economic growth as households were confident about the economy. However, economic indicators, such as new construction activity, cast doubt on the sustainability of this growth. Labor shortages, supply disruptions, higher input prices and uncertainty about tariffs are limiting what businesses can do. Robust retail … Continued

Overall inflation remains very low, helped by lower energy prices. The monthly trend through June gives support for an easing of monetary policy. The financial markets expect the Fed to cut rates at the end of the month. The futures market considers a quarter point cut in July as a certainty, and odds favor two … Continued

Manufacturing has been the weakest part of the economy this year as trade issues have resulted in declining orders. Despite that weakness, the job market continues to be solid, albeit with decelerating gains. June saw rebounding job growth from May’s very low gain. Low unemployment, stagnate wages: Despite low unemployment, wage growth is decelerating, which … Continued

The economy is slowing and consumer confidence is weakening but the consumer keeps spending, for now, though less on vehicles since retail auto sales are declining. Economy slowing: The economy gave us a head-fake of 3.1% growth in the first quarter, as that growth on paper was supported by growth in inventories and exports, which … Continued

The “bad news is good news” cycle continued last week as the stock market cheered the Fed acknowledging trade-related economic weakness and low inflation. The Dow Jones Industrial Index ended the week up almost 700 points. Bond yields have tumbled as the financial market sees rate declines as a certainty later this year with a … Continued

The Fed left rates unchanged as expected, but their assessment of economic trends and inflation took a notable downward shift compared to their “patient” view just six weeks ago. As a result of changing data and mixed concerns, the committee split on their views for future rate policy direction. Back then the Federal Open Market … Continued

The latest inflation data show that higher prices outside of housing are not materializing, and lower energy costs are keeping inflation very low. Weak inflation bolsters the view that the Fed is likely to cut rates as early as their July 31 meeting. Retail sales meet expectations: Retail sales increased 0.5% in May when analysts … Continued