Weekly Market Commentary

Federal Reserve Logo - Waterloo Weekly Market Commentary

Jeff Cox – CNBC
Fed Hikes Rates, Points to Two More Increases This Year

Summary: The Fed raised its benchmark short-term interest rate from 1.75% to 2% and indicated that it plans to raise rates twice more this year. The Fed’s statement was unusually short and showed that committee members are more optimistic that economic growth is “solid” and that strong labor market conditions and rising inflation will support further rate hikes this year. 

Shopping Mall - Waterloo Weekly Market Commentary

Jeffrey Bartash – MarketWatch
Consumer Inflation Rising at Fastest Pace in Six Years

Summary: The Consumer Price Index (CPI) showed that the cost of living is increasing at the fastest pace in six years. CPI has risen 2.8% over the last year while the core measure, which strips out volatile components, rose 2.2%. Rising gasoline, medical, rent, and home prices were the main drivers of the recent increase. 

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Alanna Petroff – CNN Money
European Central Bank Sets End Date for Stimulus Program

Summary: The ECB announced that it will be ending its bond purchase program this year. The bank’s asset purchases will be cut in half in September and will stop in December. The move indicates that the bank believes the economy no longer needs “emergency stimulus”. ECB leaders expect interest to remain at current levels through at least the summer of 2019. 

China Flag - Waterloo Weekly Market Commentary

Reuters Staff
China Unexpectedly Holds Rates Steady Despite Economic Weaknesses

Summary: The People’s Bank of China left interest rates unchanged despite recent data that showed the economy losing momentum and expectations that it would follow the rate hike by the US Fed. The lack of policy changes indicates uncertainty about the country’s economic outlook as trade spats with the US continue. 

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Bob Bryan – Business Insider
Trump Imposes Tariffs on $50 Billion Worth of Chineses Goods

Summary: The announced tariffs will be implemented in two parts with the first list going into effect July 6th. The second instalment does not have a set date. The 25% tariffs focus on industrial parts, vehicles, and chemicals and will likely have the largest impact on aerospace, information and technology, robotics, industrial machinery, and automobile industries. 

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Doug Stanglin – USA Today
China Responds to US With Tariffs of Their Own

Summary: China announced new tariffs on $34 billion worth of US imports. The 25% tariff will be applied to 545 products including soybeans, electric cars, orange juice, whiskey, salmon, and cigars. Additional tariffs that cover medical equipment, energy, and chemical products are expected to be announced at a later date. 





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