- The current federal-funds rate target set by the Federal Reserve is 5.25% - 5.50%
- The University Of Michigan Index of Consumer Sentiment declined 3% in August
- Existing home sales fell 2.2% in July
Top Three Market Headlines
Fed Chair Strikes Balanced Tone: In a highly-anticipated speech last week at an economic policy forum in Jackson Hole, WY, Federal Reserve Chair Jerome Powell emphasized that the central bank will proceed carefully in determining whether to orchestrate additional interest rate increases. The comments were interpreted by some market observers as a signal that the Fed is likely to hold rates steady for the time being after having raised the target federal-funds rate 11 times over the last 18 months. At the same time, Mr. Powell acknowledged that the economy has remained more resilient than officials expected and that there is "substantial further ground to cover" in order to bring inflation back to the bank's 2% target rate.
Consumer Sentiment Stagnant in August: After hitting a 21-month high in July, U.S. consumer sentiment retreated modestly in August. Published by the University of Michigan, the Index of Consumer Sentiment registered 69.5 in August, down 3% from 71.6 in July. While the August reading was 19% higher than a year ago and 39% above the index's all-time low recorded in June 2022, it remained below the index's 30-year average of 86.8. In a sign that consumers' concerns about inflation are lingering, the year-ahead inflation expectation of survey respondents edged up from 3.4% in July to 3.5% in August.
Existing Home Sales Fall Again in July: Sales of existing homes fell for the fourth time in five months in July, decreasing 2.2% from the prior month, according to a report last week from the National Association of Realtors. The seasonally-adjusted annualized rate (SAAR) of 4.07 million home sales was the slowest monthly sales pace since January of this year and was 16.6% below the level seen in July of last year. The weak sales trend reflects the effect of rising mortgage rates as well as a limited supply of homes for sale on the market.