Morning Report: FOMC data dump 6/18/15

Markets are higher this morning after the FOMC statement was more dovish than people had feared. Bonds and MBS are flat

The Consumer Price Index rose .4% in May, slightly below expectations. Ex-food and energy, it rose 0.1%. On a year-over-year basis, the CPI is flat, while the core index is up 1.7%. Inflation remains below the Fed’s target.

Initial Jobless Claims fell to 267,000 last week, another strong number. Real average weekly wages increased 2.3%.

The Bloomberg Consumer Comfort Index rose to 40.9 from 40.1 last week, while the Philly Fed index rose to 15.2 and the Index of Leading Economic Indicators was flat at 0.7%.

The FOMC statement was pretty much non-eventful, as was the press conference. The action was in the projection materials and the revised economic forecasts. As expected, the Fed took down its forecast for 2015 GDP growth to a range of 1.8% – 2.0% versus 2.3% – 2.7%. The Fed has been consistently high in its estimates for GDP growth ever since the crisis. It is almost as if they are trying to shoehorn an post asset bubble economy into a garden-variety Fed-driven recession model. Unemployment was taken up as well, from a range of 5.0%-5.2% to 5.2%-5.3%. We will have to wait until the minutes come out to understand the rationale there. Inflation is still expected to come in around .7%. Overall, the economy is still fragile and the Fed wants to take it slow.

The dot graph lowered the median projection for the Fed Funds rate to .7% from .9% at the March FOMC meeting, and the trajectory of interest rates is expected to be lower.

The CFPB is delaying the deadline for TRID until October, in order to give the industry a little more time. Sounds like the industry lobbied for this extension pretty hard.

We are getting a woman on the $10 bill by 2020. Jack Lew is asking for suggestions. Of course no one will be using cash anymore by 2020 anyway, and you can put whoever you want on the wallpaper on your phone…

%d bloggers like this: