The economy and the market: weekly previews, recaps, monthly summaries, and major macro events as they land.
A hawkish Fed has put inflation back at the center of the market’s focus, with core PCE, income, claims and durable goods all set to shape rate expectations. Sticky prices, resilient labor data and mixed growth signals could keep Treasury yields elevated and pressure stocks.
Fresh data showed a resilient U.S. consumer and labor market, but housing remained under heavy pressure. A hawkish Fed hold, stronger retail sales, and firmer growth signals pushed yields higher, while builder sentiment weakened and housing starts sank to their lowest level since 2020.
The June Philadelphia Fed Manufacturing Index rebounded to 10.3 from -0.4, signaling that factory activity returned to expansion after May’s slump. The surprise upside reading supports the soft-landing narrative and gives the Fed less reason to rush into rate cuts.
The Fed’s latest H.4.1 update shows total assets edging up to $6.736 trillion, keeping the balance sheet in a steady $6.7 trillion range. Reserve balances remain above $3 trillion, signaling ample liquidity and no immediate funding stress, even as markets react more to hawkish Fed messaging.
U.S. mortgage rates eased again as Treasury yields fell, with the 30-year fixed dropping to 6.47% and the 15-year to 5.81%. The move offers modest relief for buyers and refinancers, but housing remains constrained by still-elevated borrowing costs and weak builder sentiment.
Weekly jobless claims held near 226,000, signaling layoffs remain contained, but continuing claims climbed to 1.810 million as workers take longer to find new jobs. The report points to a cooling labor market, nudges Treasury yields lower, and supports the Fed’s higher-for-longer stance.
MBA mortgage data shows the 30-year rate stuck at 6.6%, keeping borrowing costs elevated even as applications rose. Refinance and purchase demand improved week over week, but affordability remains the main constraint as Treasury yields stay high and the Fed keeps policy restrictive.
U.S. pending home sales rose 3.8% in May, topping forecasts even as 30-year mortgage rates climbed above 6.5%. Softer list prices, more inventory and widespread price cuts helped unlock demand, suggesting housing is thawing and giving the Fed less reason to rush into rate cuts.
The Federal Reserve kept its policy rate at 3.75% for a fourth straight meeting, but updated projections showed 9 of 18 policymakers expecting at least one hike this year. Stocks fell, Treasury yields jumped, and traders quickly repriced the path of policy.
U.S. retail sales rose more than expected in May, signaling that household spending is still powering the economy. The broad-based gain lifted growth hopes, pushed Treasury yields higher, and added pressure on the Fed’s rate-cut outlook as stocks sold off on the stronger demand data.
U.S. homebuilding took a sharp hit in May as housing starts fell 15.4% to 1.177 million, far below expectations. Multifamily construction drove most of the drop, while permits held near 1.4 million, suggesting the housing pipeline is slowing but not collapsing.
U.S. manufacturing is still expanding, but momentum cooled in June. The Empire State index fell sharply from May’s surge, while industrial production rose just 0.1% and missed expectations. The data point to slower factory growth, not contraction, and support a mildly dovish Fed outlook.
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