- The Federal Reserve raised the federal-funds rate target range to 5.25% — 5.50%
- U.S. GDP increased at an annualized rate of 2.4% in the second quarter
- The Consumer Confidence Index rose to 117.0 in July, its highest level in two years
Top Three Market Headlines
Fed Enacts Another Rate Hike: The Federal Reserve last week raised the target for its interest rate benchmark, the federal-funds rate, by another quarter percentage-point, to a range of 5.25% to 5.50%. This marked the 11th increase since March 2022 and came after officials held the target range steady at their previous meeting last month. Chairman Jerome Powell stated that the Fed remains committed to bringing inflation back to the central bank's target of 2%, but did not indicate whether officials intend to raise rates again at their next meeting in September.
U.S. GDP Growth Picks Up in Q2: The Bureau of Economic Analysis reported last week that real (inflation-adjusted) U.S. gross domestic product (GDP), a measure of all goods and services produced, rose at an annualized rate of 2.4% in the calendar quarter ended June 30, 2023 compared to the prior quarter. This was the fourth straight quarter of positive GDP growth and represented an acceleration from 2.0% in the first quarter. Growth in Q2 was keyed by rising consumer spending across both goods and services along with increased business investment, including inventory and nonresidential fixed investment. On the other hand, decreased exports served as a drag on growth.
Consumer Confidence Trends Upward: U.S. consumers' outlook rose to its highest level in two years, according to the latest Consumer Confidence Index report issued by the Conference Board, a private research group. The index rose to 117.0 in July from 110.1 in the prior month, marking the second straight monthly increase for the metric. Consumers' assessment of current conditions as well as their future expectations both improved. Following suit, the Index of Consumer Sentiment published by the University of Michigan, released last Friday, registered its second consecutive increase, rising 11% in July to its highest level since October 2021.