Weekly Economic & Financial Commentary

Summary United States: Prices Push Higher in May, Signaling Little Immediate Relief for Consumers

  • Consumer price inflation continued to push higher in May, with the consumer price index rising more than expected and lifting the annual rate of inflation to a fresh 40-year high. Consumers continue to feel the pinch of higher prices, evident in the persistent deterioration in consumer sentiment. To date, households have demonstrated uncanny staying power in the face of inflation, but with little signs of immediate relief from prices, this will only become more challenging.
  • Next week: Retail Sales (Tue), FOMC Rate Decision (Tue), Housing Starts (Wed)

International: European Central Bank Readies Rate Hike as Reserve Bank of Australia Delivers

  • The European Central Bank (ECB) took another step this week on its path of policy normalization at its latest monetary policy announcement. The ECB said it intends to raise rates by 25 bps in July, perhaps by an even larger amount in September, and deliver a steady series of rate hikes over time. The Reserve Bank of Australia surprised markets with a larger-than-expected 50 bps rate increase, which we expect it will follow up with another 50 bps hike at its July announcement.
  • Next week: U.K. GDP (Mon), China Retail & Industrial Activity (Wed), Australia Employment (Thu)