Read the highlights of this week’s commentary from Helios:
Markets took a bit of a ride last week, with the S&P 500 bouncing from big down days to moderate bounce backs before ending the week down 5.75%. Yields of 10-year US government bonds struggled to find a direction, increasing 32 basis points Monday and Tuesday before falling 27 on Wednesday and Thursday and finally ending the week up 7 basis points.
The Fed raised its benchmark rate by 75 basis points, moving its target from 1.50% to 1.75%, amid a reacceleration in headline inflation in May. While Fed Chair Powell noted that they are committed to tackling inflation and a 50 or 75 basis point hike is on the table for the July FOMC meeting, he also noted that there are areas of the economy facing higher prices that aren’t likely to be impacted by rising rates.
Retail sales disappointed and declined in May for the first time this year, falling 0.3%, below expectations of a 0.1% gain and the 0.9% April gain. Consumer’s resilience in the face of inflation may be starting to wane as consumers shifted their dollars to essential purchases while previously hot categories like furniture, electronics, and online shopping were the hardest hit.
Initial jobless claims continue to come in low, with 229K new claims in the latest release, slightly above expectation of 217K.
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