Financial markets are fairly quiet ahead of today’s Fed announcement. Treasuries are essentially unchanged, and S&P 500 futures are up 3 points. A Politico article late yesterday reported that the White House may announce fresh tariffs on Chinese goods as soon as Friday or next week. The amount of tariffs said to be considered is not substantial, but the greater risk from a market perspective would be further escalation of trade tensions between the world’s two largest economies. The Fed is expected to raise the fed funds target range by another 25 bps today, but there are several other items that will be more closely followed. The minutes of the May meeting suggested a divorce of the IOER rate from the top-end of the target range may be appropriate. More specifically, participants generally agreed that a 5 bps reduction in IOER would be sufficient with the goal of pushing the effective funds rate closer to the middle of the target range. We discussed this issue in greater detail in our June Monthly Market Commentary. As always (and for better or worse), the market is eagerly awaiting the updated Fed projections, particularly the new “dot plot” (participant forecasts for fed funds). Lastly, will the FOMC make any adjustments to its forward guidance in the official statement, including perhaps a more flexible inflation target?

Jason Haley
Managing Director, Investment Management Group


Date TimeEventSurveyActualPriorRevised
06/12/2018NFIB Small Business Optimism105107.8104.8
06/12/2018CPI MoM0.20%0.20%0.20%
06/12/2018CPI Ex Food and Energy MoM0.20%0.20%0.10%
06/12/2018CPI YoY2.80%2.80%2.50%
06/12/2018CPI Ex Food and Energy YoY2.20%2.20%2.10%
06/12/2018CPI Index NSA251.611251.588250.546
06/12/2018CPI Core Index SA256.884256.889256.45
06/12/2018Real Avg Weekly Earnings YoY0.30%0.40%
06/12/2018Real Avg Hourly Earning YoY0.00%0.20%
06/12/2018Monthly Budget Statement-$144.0b-$146.8b-$88.4b
06/13/2018MBA Mortgage Applications-1.50%4.10%
06/13/2018PPI Final Demand MoM0.30%0.50%0.10%
06/13/2018PPI Ex Food and Energy MoM0.20%0.30%0.20%
06/13/2018PPI Ex Food, Energy, Trade MoM0.20%0.10%0.10%
06/13/2018PPI Final Demand YoY2.80%3.10%2.60%
06/13/2018PPI Ex Food and Energy YoY2.30%2.40%2.30%
06/13/2018PPI Ex Food, Energy, Trade YoY2.60%2.50%
06/13/2018FOMC Rate Decision (Upper Bound)2.00%1.75%
06/13/2018FOMC Rate Decision (Lower Bound)1.75%1.50%
06/14/2018Retail Sales Advance MoM0.40%0.30%0.20%
06/14/2018Retail Sales Ex Auto MoM0.50%0.30%
06/14/2018Retail Sales Ex Auto and Gas0.40%0.30%
06/14/2018Retail Sales Control Group0.40%0.40%0.50%
06/14/2018Import Price Index MoM0.50%0.30%
06/14/2018Import Price Index ex Petroleum MoM0.20%0.10%
06/14/2018Import Price Index YoY3.90%3.30%
06/14/2018Export Price Index MoM0.30%0.60%
06/14/2018Export Price Index YoY3.80%
06/14/2018Initial Jobless Claims223k222k
06/14/2018Continuing Claims1734k1741k
06/14/2018Bloomberg Consumer Comfort54.8
06/14/2018Business Inventories0.30%0.00%
06/15/2018Empire Manufacturing1920.1
06/15/2018Industrial Production MoM0.20%0.70%
06/15/2018Manufacturing (SIC) Production0.10%0.50%
06/15/2018Capacity Utilization78.10%78.00%
06/15/2018U. of Mich. Sentiment98.598
06/15/2018U. of Mich. Current Conditions111.8
06/15/2018U. of Mich. Expectations89.1
06/15/2018U. of Mich. 1 Yr Inflation2.80%
06/15/2018U. of Mich. 5-10 Yr Inflation2.50%
06/15/2018Total Net TIC Flows-$38.5b
06/15/2018Net Long-term TIC Flows$61.8b
06/18/2018NAHB Housing Market Index7070
06/19/2018Housing Starts1315k1287k
06/19/2018Housing Starts MoM1.90%-3.70%
06/19/2018Building Permits1335k1352k1364k
06/19/2018Building Permits MoM-2.10%-1.80%-0.90%
06/20/2018MBA Mortgage Applications-1.50%
06/20/2018Current Account Balance-$128.2b
06/20/2018Existing Home Sales5.58m5.46m
06/20/2018Existing Home Sales MoM2.10%-2.50%