Morning Market Brief: Monday, June 12, 2023

Anticipating the Fed’s next move?

The US Federal Reserve Board (Fed) will make its next interest-rate policy decision on Wednesday. The decision to pause or hike could signal the Fed’s short-term interest rate path intentions to investors. Interest rates have moved into more restrictive territory, but it is uncertain whether they are restrictive enough to lower inflation closer to the Fed’s 2% target. ?

• US consumer price inflation data released Tuesday by the US Bureau of Labor Statistics will show how much further inflation needs to decline to reach the Fed’s target range.
• Wednesday will be the mid-week spotlight for investors as they parse through details from Fed Chairman Powell’s press conference after the rate decision. The Fed increased rates at each of it previous ten meetings.
• May’s Canadian housing start details will be announced on Thursday. In April, housing starts beat expectations rising by 22% from March. There were 261,600 new starts, according to Canada Mortgage and Housing Corporation.
• May’s US retail sales will be released by the US Census Bureau on Thursday. The data will indicate the health of US consumers. So far in 2023, wage gains helped support spending.
• A University of Michigan US consumer sentiment report and inflation expectations for June will be updated on Friday. In May, the index was revised up to 59.2, still the lowest level for six months.

This week, North American markets will likely be influenced by expectations of the Fed’s rate decision. However, it will be critical for market participants to evaluate the long-term impact of the Fed’s actions on the economy. This analysis is made more challenging by the ambiguous extent of the lag before policy changes fully impact the market. Stay informed about economic updates to help navigate the uncertainty surrounding policy decisions.

At?CIBC Private Wealth, we aim to take a comprehensive approach to managing, building and protecting your wealth. If you'd like to discuss this market and economic update in more detail, please get in touch with your advisor any time.