June 17, 2019 Headlines

The tone in risk markets is modestly improved this morning, and as a result, Treasury yields are drifting higher. The focus this week will be on Wednesday’s FOMC meeting, as well as anticipation of next week’s G20 summit in Japan. Regarding the former, the general expectation for now is that the Fed will set the table for the initiation of policy easing at the next meeting in July. For the G20 summit, Commerce Secretary Wilbur Ross said the best that can be hoped for is a resumption of negotiations between U.S. and Chinese officials.

If the Fed does indeed decide to keep the policy rate unchanged this week, it will give them more time to assess growth and inflation implications of the U.S./China skirmish (and see what comes from the G20 summit). As such, the communication on Wednesday will be very tricky for Fed leaders. If all goes according to market expectations, Fed Chair Powell will effectively have to open the door for a July rate cut without implying that such a decision is a “done deal.” The updated Summary of Economic Projections should show a lower projected path for the fed funds rate from FOMC participants, as well as lower GDP and inflation forecasts.

Jason Haley
Managing Director, Investment Management Group

6/17/2019Empire Manufacturing11-8.617.8
6/17/2019NAHB Housing Market Index6766
6/17/2019Net Long-term TIC Flows$30.8b-$28.4b
6/17/2019Total Net TIC Flows-$8.1b
6/18/2019Housing Starts1240k1235k
6/18/2019Housing Starts MoM0.40%5.70%
6/18/2019Building Permits1293k1296k1290k
6/18/2019Building Permits MoM0.20%0.60%0.20%
6/19/2019MBA Mortgage Applications26.80%
6/19/2019FOMC Rate Decision (Upper Bound)2.50%2.50%
6/19/2019FOMC Rate Decision (Lower Bound)2.25%2.25%
6/19/2019Interest Rate on Excess Reserves2.35%2.35%
6/20/2019Current Account Balance-$124.3b-$134.4b
6/20/2019Initial Jobless Claims220k222k
6/20/2019Philadelphia Fed Business Outlook10.416.6
6/20/2019Continuing Claims1680k1695k
6/20/2019Bloomberg Consumer Comfort61.6
6/20/2019Bloomberg Economic Expectations52.5
6/20/2019Leading Index0.10%0.20%
6/21/2019Markit US Manufacturing PMI50.550.5
6/21/2019Markit US Services PMI5150.9
6/21/2019Markit US Composite PMI50.9
6/21/2019Existing Home Sales5.25m5.19m
6/21/2019Existing Home Sales MoM1.20%-0.40%





















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