Contributors Fundamental Analysis Weekly Economic & Financial Commentary: Higher for Longer Mantra on Repeat in...

Weekly Economic & Financial Commentary: Higher for Longer Mantra on Repeat in Week Replete with Fed Speak


United States: High Mortgage Rates Burden Homebuyers

  • Homebuying retreated in April following a leg up in mortgage rates. Meanwhile, durable goods orders surprised to the upside, suggesting the manufacturing industry is on better footing.
  • Next week: Consumer Confidence (Tue.), Personal Income & Spending (Fri.)

International: Foreign Economies Show Mixed Inflation Trends amid Ongoing Economic Expansion

  • In this week’s price news, Canada’s underlying inflation slowed more than forecast, which we think keeps the Bank of Canada on course for June easing. U.K. inflation slowed less than expected, which should see the Bank of England lean toward August or later for an initial rate cut. Separately, May composite PMI figures for the Eurozone and United Kingdom remained comfortably in expansion territory, suggesting gradually strengthening recoveries as the year progresses.
  • Next week: China PMIs (Fri.), Eurozone CPI (Fri.), Canada GDP (Fri.)

Interest Rate Watch: Higher for Longer Mantra on Repeat in Week Replete with Fed Speak

  • The latest FOMC meeting minutes and a flock of Fed officials on the speaking circuit this week provided additional evidence that rate cuts this summer are not likely. On balance, the Fed communication channel conveyed a sense that monetary policy was transmitting through the economy at a slower pace than previous cycles and a desire for more patience in order to gain certainty that inflation is on its way to 2%.

Credit Market Insights: Credit Card Delinquencies Continue to Rise in Q1

  • All eyes have been on households’ balance sheets as the consumer has continued to spend at an unexpected pace in the face of elevated interest rates. Recent data have suggested that cracks in households’ financial situations are beginning to emerge, especially for lower income households.

Topic of the Week: Drivers… Start Your Engines

  • Monday is a federal holiday in the United States. In addition to being a time of remembrance, Memorial Day also marks the un-official start to summer. In our Topic of the Week, we describe what a trip to the lake or the beach has in common with the big races in Indianapolis and Charlotte this weekend and what it all has to do with earnings.

Full report here.

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