Weekly Market Commentary June 16th to June 20th 2025
The Federal Open Market Committee (FOMC) announced on Wednesday that interest rates will remain steady at 4.25% to 4.50%, marking the fourth consecutive meeting with no changes to rates. Fed Chairman Jerome Powell indicated that there are still uncertainties regarding the economic outlook, with risks present on both sides of the dual mandate, a sentiment that has been communicated to the market since the start of the year. The revised dot plot, which illustrates each Fed official’s projections for short-term rates and provides insights on individual committee members’ sentiment, reflects a somewhat more divided yet slightly more hawkish Federal Reserve. The survey now shows two cuts in 2025 and just one cut in both 2026 and 2027.
Retail Sales decreased by 0.9% in May, marking the second consecutive monthly decline, primarily due to a drop in motor vehicle sales as shoppers rushed to make purchases before tariffs took effect. When excluding automobiles, sales fell 0.3% in May, indicating a decline in consumer confidence. However, the category of sales that omits gasoline, vehicles, and dining establishments saw a 0.4% increase last month, suggesting that consumers are still purchasing some discretionary items.
According to the latest report from the Census Bureau, Housing Starts slightly rose to a seasonally adjusted annual rate of 1.26 million in May, which is the lowest level in over five years. This reflects a 9.8% drop from April, and a 4.6% decline compared to the same month last year. Single-family housing starts contracted in comparison to a year ago, declining 7.3%.
In the holiday shortened week, it was a rather stagnant week for equity markets. All major indices moved less than 1% in either direction with the S&P 500 finishing at 5,968, the Nasdaq at 19,447 and the Dow Jones Industrial Average at 42,206. WTI Crude continued its volatility as geopolitical tensions rise, falling under $70 for a brief time period this week but finishing at $75. The 10-Year Treasury has continues to trade in a range over the past month, finishing the week at 4.38%.
This upcoming week important economic releases include both the S&P U.S. Services and Manufacturing PMI, and Personal Consumption Expenditures (PCE) Index.
