The biggest news this week stemmed from the Federal Reserve’s meeting on Tuesday, in which the Fed decided to keep the federal funds target range at 0.25 to 0.50 percent, as expected.
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The results of the meeting were unanimous, and according to Bloomberg, the likelihood of a July rate hike is dependent on the results of June’s employment report. The Fed’s quarterly forecast did indicate that policymakers are still predicting two rate hikes yet this year but at a slower pace.
The Housing Market Index, which is compiled by the National Association of Home Builders, finally broke through four months of holding at the 58 level. The index increased by two points with the future sales component surging 5 points and homebuyer traffic, which increased 3 points.
May housing starts were solid but even with permits increasing 0.7 percent, the year-over-year rate remained deep in the negative at minus 10.1 percent. Starts fell 0.3 percent last month but the year-over-year rate increased to a strong 9.5 percent.
Last week in the economy:
- The purchase sector of MBA Mortgage Applications dropped 5 percent in the June 10 week, despite lower mortgage rates. Refinancing activity also slowed and was down 1 percent.
- Initial Jobless Claims are still trending down but initial claims increased by 13,000 in the June 11 week. The 4-week average is down slightly to 269,250, which is lower than the month-ago trend.
- Bloomberg’s Consumer Comfort dropped a drastic 1.1 points in the June 12 week to 42.1, indicating weakening confidence in the economy.
- The core Consumer Price Index came in for May at plus 0.2 percent. Year-over-year, total prices are only up 1 percent and core prices up 2.2 percent.
- Retail Sales were a positive in May, up a better-than-expected 0.5 percent.
What’s on economic calendar for the week of June 20, 2016:
- Wednesday – MBA Mortgage Applications, FHFA House Price Index, Existing Home Sales
- Thursday – Jobless Claims, New Home Sales
- Friday – Consumer Sentiment
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