Weekly economic review & outlook
Fed fully committed to policy accommodation
June 15, 2020
You Need to Know
Week in review
No rate hike expected for several years
The Fed kept rates steady in June while its projections showed no rate increases until at least 2023 as it looks to support an economic rebound.
Consumer inflation falls again for May
The overall CPI and core CPI each decreased for a third consecutive month as COVID-19 continues to hold demand growth below that for supply of goods and services.
Retail sales expected to have a strong rebound
After a disastrous April, retail sales are expected to have a substantial increase as retailers began to reopen in May.
Housing starts also set to bounce back
As economic activity begins to pick up again, housing starts should also rise from April’s very slow pace.
Noting the dramatically negative economic impact from COVID-19 since February, the Federal Open Market Committee (FOMC, the Fed’s policy-making arm) kept its zero interest rate policy in place at its June meeting while signaling an extended period of accommodation for the economy. The Fed also announced it would continue its asset purchases at the current pace to maintain a sufficient flow of credit and liquidity within financial markets. These purchases would add to the $3.0 trillion increase in the Fed’s balance sheet since late February.