The economy and the market: weekly previews, recaps, monthly summaries, and major macro events as they land.
97 articles
Fresh U.S. data shows inflation remains sticky, spending has cooled, and consumer sentiment is still near historic lows. While borrowing and labor markets have held up, households are growing more defensive as higher prices and elevated rates continue to pressure budgets.
Markets are focused on the Fed’s rate decision, new projections and Jerome Powell’s press conference as hotter inflation and firm labor data keep a June hold firmly priced in. Retail sales, housing reports and industrial production could shape the next move for yields, homebuilders and rate-sensitive stocks.
U.S. inflation remained stubborn last week, with CPI and PPI both running hot while core prices cooled more than feared. Jobless claims edged higher, mortgage rates climbed, and consumer sentiment improved slightly, leaving markets caught between sticky inflation and only gradual labor-market softening.
U.S. consumer sentiment improved in June, rising from record lows as easing gasoline prices lifted household mood. Inflation expectations also edged lower, giving markets a modest boost, but confidence remains historically weak and price pressures still point to a cautious Federal Reserve.
The Fed’s assets rose to $6.725 trillion, signaling ongoing reserve management rather than a return to stimulus. With QT over and reserves still ample, the move points to stable funding conditions, not rate-cut fuel, even as markets continue to price a June hold.
Freddie Mac’s latest survey shows the average 30-year fixed mortgage rate rising to 6.52%, near its 2026 high and keeping monthly payments elevated. The uptick reinforces a tough affordability backdrop for buyers, while also signaling that housing turnover is likely to stay subdued.
Initial jobless claims climbed above forecasts to 229,000 and continuing claims also rose, signaling a softer labor market and more friction in job searches. But filings remain in a historically low range, suggesting cooling rather than collapse and reinforcing the case for a Federal Reserve hold.
U.S. producer prices rose 1.1% in May, far above forecasts, while annual PPI climbed to 6.5%, the highest since late 2022. Energy costs led the surge, adding pressure on businesses and reinforcing the case for the Federal Reserve to stay cautious on rate cuts.
Mortgage rates edged higher to 6.6%, but borrowers still rushed in, with applications jumping 10.8% for the week. The rebound shows housing demand remains sensitive to rates, even as affordability stays tight and higher Treasury yields keep mortgage relief elusive.
U.S. inflation reaccelerated in May, with headline CPI rising to 4.2% year over year as energy costs did most of the damage. Core CPI stayed cooler than feared at 2.9%, easing market panic but keeping the Fed on a higher-for-longer path.
The NFIB Small Business Optimism Index fell to 95.3 in May, below expectations and its long-run average, as owners grew more cautious on hiring and expansion. Inflation concerns intensified, with more firms planning price hikes, a signal that could keep the Fed on hold.
May existing home sales rose to 4.17 million, topping forecasts and marking the fastest pace since December. The rebound came even as 30-year mortgage rates held near 6.48%, signaling resilient buyer demand. Tight inventory and record prices, however, show the housing market remains constrained.
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