- Fed day. The Federal Reserve (Fed) is expected to increase rates this afternoon by 25 basis points (.25%) to a target rate of 1.75%-2.00%. This would be the second hike this year and seventh hike since it started increasing rates in December 2015. As always, what the Fed says about inflation and the economy will be closely watched. Additionally, there is a press conference after the announcement, so expect some potential afternoon volatility. For more on our thoughts on the Fed decision today, be sure to read our latest Weekly Economic Commentary.
- President Trump likely to press on with China tariffs.In a move expected to exacerbate tensions with one of the U.S.’ largest trading partners, President Trump looks poised to move forward with tariffs, possibly by the end of the week. The move is likely to trigger immediate retaliations and comes on the heels of the U.S.-North Korea summit, which the Chinese reportedly helped bring to fruition. Nonetheless, the overall impact to both countries’ economies would be nominal, though the situation is one that bears ongoing monitoring as relations between the two countries remain choppy.
- Surging fuel costs spur wholesale inflation. Producer prices rose more than expected last month, up 0.5% from April and 3.1% year over year, to more than 6-year highs. Growth in the headline reading was driven primarily by rising fuel costs, as wholesale gasoline prices spiked 10% from the prior month. When stripped out, core inflation rose a more modest 2.3% from a year ago; however, the data aligns with yesterday’s consumer inflation figures, both reinforcing the Fed’s notion to raise rates this afternoon at the conclusion of its monetary policy meeting.
- Here comes the World Cup. One of the largest and most watched sporting events in the world kicks off tomorrow, with the FIFA World Cup™ starting in Russia. Although we admit there is absolutely no correlation between stock returns and the World Cup winner, today on the LPL Research blog we will take a look at why stocks tend to do significantly better when a European country wins. Enjoy the games, everyone!
Monitoring the Week Ahead
- Fed: FOMC Rate Decision
- PPI (May)
- UK: CPI & PPI (May)
- Eurozone: Industrial Production (Apr)
- China: Retail Sales (May)
- China: Industrial Production (May)
- Weekly Jobless Claims (Jun 9)
- Retail Sales (May)
- Germany: CPI (May)
- France: CPI (May)
- UK: Retail Sales (May)
- ECB: Main Refinance Rate
- BOJ: Policy Balance Rate
- Empire Mfg. Report (June)
- Industrial Production (May)
- Eurozone: CPI (May)
- Italy: CPI (May)
- China: Money Supply and New Loan Growth (May)
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