June – July 2018

U.S. Economic and Market Highlights

Higher inflation was anticipated in the second quarter, but the threat of tariffs and trade wars kept it from accelerating. Core CPI remained steady at 2.2% for the trailing 12 months and headline CPI increased 2.8% with energy prices having risen 11.7% during that time.
The trade tariffs created uncertainty and drove investors toward safe-haven investments, primarily fixed income (government and investment grade bonds), which kept the long-term Treasury interest rates from rising. Read more →

First quarter U.S. annualized Gross Domestic Product growth was revised downward to 2.0%, below the initial 2.3% estimate.
Existing-home sales in the U.S. unexpectedly declined due to rising mortgage rates, higher prices, and low supply.
Core Consumer Price Index, which excludes the volatile energy and food components, rose 2.2%. Read more →

The U.S. Fed has gradually raised interest rates since December 2015, and is expected to raise another 25 bps in June, in an effort to fulfill their “dual mandate” of promoting price stability and strong employment.
Core Personal Consumption Expenditure (PCE) jumped to 1.9%, year-over-year, nearing to the Fed’s 2.0% target, and U.S. job growth increased in April and the unemployment rate dropped to a near 18-year low of 3.9% near the Fed’s forecast of 3.8% by year-end. Read more →