June 16, 2022 Headlines

The Treasury curve bear flattened overnight in a fade to yesterday’s oversized post-FOMC rally and a surprise 50 bps rate hike by the Swiss central bank. Equities are poised to give back all of yesterday’s gains (and more) with S&P 500 futures down 1.9% (8:22am EDT). Concerned with un-anchored consumer inflation expectations from multiple reports in the last week, the FOMC followed the bond market’s lead by raiding the fed funds target range 75 bps yesterday. Powell acknowledged that such an outsized hike was abnormal and left open the possibility of another 50-75 bps hike in July. Both the official statement and Powell’s press conference also made it very clear that price stability is the clear priority relative to Fed’s other mandate (full employment) and a soft landing. The updated Summary of Economic Projections (SEP) included a much more hawkish shift from the committee relative to the last update in March. The median participant forecast for the fed funds rate is now 3.4% by year end (up from 1.9% in March), and they now have the funds rate peaking at 3.8% in 2023 (2.8% previously). For comparison, the bond market is currently pricing a 3.65% funds rate by year end and peaking at 4% in Q2 2023.

Jason Haley
Chief Investment Officer

Date Event Surv(M) Actual Prior Revised
06/14/22 NFIB Small Business Optimism 93 93.1 93.2 —
06/14/22 PPI Final Demand MoM 0.80% 0.80% 0.50% 0.40%
06/14/22 PPI Ex Food and Energy MoM 0.60% 0.50% 0.40% 0.20%
06/14/22 PPI Ex Food, Energy, Trade MoM 0.50% 0.50% 0.60% 0.40%
06/14/22 PPI Final Demand YoY 10.90% 10.80% 11.00% 10.90%
06/14/22 PPI Ex Food and Energy YoY 8.60% 8.30% 8.80% 8.60%
06/14/22 PPI Ex Food, Energy, Trade YoY 6.90% 6.80% 6.90% 6.80%
06/15/22 MBA Mortgage Applications — 6.60% -6.50% —
06/15/22 Empire Manufacturing 2.3 -1.2 -11.6 —
06/15/22 Retail Sales Advance MoM 0.10% -0.30% 0.90% 0.70%
06/15/22 Retail Sales Ex Auto MoM 0.70% 0.50% 0.60% 0.40%
06/15/22 Retail Sales Ex Auto and Gas 0.40% 0.10% 1.00% 0.80%
06/15/22 Retail Sales Control Group 0.30% 0.00% 1.00% 0.50%
06/15/22 Import Price Index MoM 1.10% 0.60% 0.00% 0.40%
06/15/22 Import Price Index ex Petroleum MoM 0.60% -0.10% 0.40% 0.50%
06/15/22 Import Price Index YoY 11.90% 11.70% 12.00% 12.50%
06/15/22 Export Price Index MoM 1.30% 2.80% 0.60% 0.80%
06/15/22 Export Price Index YoY — 18.90% 18.00% 18.30%
06/15/22 Business Inventories 1.20% 1.20% 2.00% 2.40%
06/15/22 NAHB Housing Market Index 67 67 69 —
06/15/22 FOMC Rate Decision (Upper Bound) 1.50% 1.75% 1.00% —
06/15/22 FOMC Rate Decision (Lower Bound) 1.25% 1.50% 0.75% —
06/15/22 Interest on Reserve Balances Rate 1.65% 1.65% 0.90% —
06/15/22 Net Long-term TIC Flows — $87.7b $23.1b —
06/15/22 Total Net TIC Flows — $1.3b $149.2b $108.7b
06/16/22 Housing Starts 1693k 1549k 1724k 1810k
06/16/22 Building Permits 1778k 1695k 1819k 1823k
06/16/22 Housing Starts MoM -1.80% -14.40% -0.20% 5.50%
06/16/22 Building Permits MoM -2.50% -7.00% -3.20% -3.00%
06/16/22 Philadelphia Fed Business Outlook 5 -3.3 2.6 —
06/16/22 Initial Jobless Claims 217k 229k 229k 232k
06/16/22 Continuing Claims 1304k 1312k 1306k 1309k
06/17/22 Industrial Production MoM 0.40% — 1.10% —
06/17/22 Capacity Utilization 79.20% — 79.00% —
06/17/22 Manufacturing (SIC) Production 0.30% — 0.80% —
06/17/22 Leading Index -0.40% — -0.30% —

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