"Overall economic activity appears to have picked up after edging down in the first quarter," the statement said. "Job gains have been robust in recent months, and the unemployment rate has remained low. Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher energy prices, and broader price pressures."
Home building sentiment falls for a sixth straight month in June:
Stocks rallied on Wednesday after the Federal Reserve raised rates by 75 basis points and signalled that a similar rate hike may be coming in July, boosting market confidence that the central bank is committed to controlling decades high inflation. The Dow Jones Industrial Average rose over 300 points, while the S&P 500 and Nasdaq Composite climbed about 1.5% and 2.5% higher, respectively.
Wall Street was volatile after the central bank's rate hike but later jumped as Fed Chair Jerome Powell said during a press conference that "either a 50 basis point or a 75 basis point increase seems most likely at our next meeting." That comment came as a surprise to investors, as Powell signalled previously that bank would only raise rates by at most 50 basis points each meeting.
U.S. home builders' sentiment fell for a sixth consecutive month to its lowest level since June 2020 this month, as continuous supply chain issues and rising inflation weighed on the housing market.
Here's how the market settled on Wednesday:
The National Association of Home Builders/ Wells Fargo Housing Market Index fell by 2 points to 67 in June. While any reading above 50 is considered positive, the index has fallen significantly from its reading of 90 at the end of 2020.
Beneath the headline, buyer traffic fell 5 points to 48, current sales conditions fell 1 point to 77, and sales expectations for the next six month fell 2 points to 61.
S&P 500 Index
Dow Jones Industrial Average
"Six consecutive monthly declines for the HMI is a clear sign of a slowing housing market in a high-inflation, slow-growth economic environment," said Jerry Konter, chairman of the NAHB, in a press statement. "The entry-level market has been particularly affected by declines for housing affordability and builders are adopting a more cautious stance as demand softens with higher mortgage rates."
Nasdaq Composite Index
Retail sales post unexpected decline in May:
Retail sales unexpectedly declined in May as increasing gas prices pulled back spending in other categories.
Fed hikes benchmark interest rate by 0.75 percentage point:
U.S. retail sales fell 0.3% in May, according to the Commerce Department's latest report published Wednesday, down from April's downwardly revised increase of 0.7%. Last month's print also market the first decline in retail sales in five months.
The Federal Reserve on Wednesday hiked interest rates by 75 basis points, posting the most aggressive rate hike since 1994. That hike brings its benchmark fund rate to a range of 1.5% to 1.75%, marking the highest level since before the start of the coronavirus pandemic in March 2020.
Beneath the headline, spending at the gas pump was up 4% month-to-month and 43.2% year-over-year. Excluding autos and gas sales, retail sales rose 0.1% in May, compared to April's 0.8% increase.
At the conclusion of its two-day policy meeting, the Federal Open Market Committee said in a statement it was "strongly committed to returning inflation to its 2 percent objective."
Policymakers also cut their economic growth outlook for 2022, now expecting a 1.7% GDP gain, down from their previous forecast of 2.8% in March. However, the committee still holds an optimistic outlook on the U.S. economy even with higher inflation.
"Overall economic activity appears to have picked up after edging down in the first quarter," the statement said. "Job gains have been robust in recent months, and the unemployment rate has remained low. Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher energy prices, and broader price pressures."
Home building sentiment falls for a sixth straight month in June:
U.S. home builders' sentiment fell for a sixth consecutive month to its lowest level since June 2020 this month, as continuous supply chain issues and rising inflation weighed on the housing market.
The National Association of Home Builders/ Wells Fargo Housing Market Index fell by 2 points to 67 in June. While any reading above 50 is considered positive, the index has fallen significantly from its reading of 90 at the end of 2020.
Beneath the headline, buyer traffic fell 5 points to 48, current sales conditions fell 1 point to 77, and sales expectations for the next six month fell 2 points to 61.
"Six consecutive monthly declines for the HMI is a clear sign of a slowing housing market in a high-inflation, slow-growth economic environment," said Jerry Konter, chairman of the NAHB, in a press statement. "The entry-level market has been particularly affected by declines for housing affordability and builders are adopting a more cautious stance as demand softens with higher mortgage rates."
Retail sales post unexpected decline in May:
Retail sales unexpectedly declined in May as increasing gas prices pulled back spending in other categories.
U.S. retail sales fell 0.3% in May, according to the Commerce Department's latest report published Wednesday, down from April's downwardly revised increase of 0.7%. Last month's print also market the first decline in retail sales in five months.
Beneath the headline, spending at the gas pump was up 4% month-to-month and 43.2% year-over-year. Excluding autos and gas sales, retail sales rose 0.1% in May, compared to April's 0.8% increase.
