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Markets and economy

Economic commentary

Fed moves to an easing bias

While the Fed kept interest rates unchanged at the June FOMC meeting, there were significant changes to the policy statement, the Summary of Economic Projections (SEPs), and Chairman Powell's press conference – all of which were quite dovish. While a near-term rate cut has yet to be confirmed, there was a definite easing bias in the communication with many Fed officials viewing lower rates as necessary to sustain economic growth in light of risks associated with trade/tariff tensions and slower growth abroad, as well as to boost inflation expectations which remain stubbornly below the Fed’s 2.0 percent goal. 

Economic commentary

Consumers still leading the way forward

Building fears of a sharp slowdown for the economy are being refuted by solid consumer data. Retail sales rose by 0.5 percent for May, a solid rate that suggests that job gains and accelerating wages continue to drive consumer spending. Moreover, April data – originally reported as falling by 0.2 percent – were revised upward to an increase of 0.3 percent. Core retail sales were up by 0.5 percent for May as well, showing that spending gains were widespread across categories.