The FOMC rate decision will highlight the economic data releases that today. The decision will be made at 2 PM ET with expectations that the Fed will skip for the 1st time after 10 consecutive rate hike’s saw the target fed funds rate rise from 0.25% to 5.25%. Although the Fed is expected to skip this meeting, the expectations are still for a 25 basis point hike in July.
The decision will also include the latest estimates for the central tendencies for GDP, inflation, and employment. The federal also release the latest estimate of the “Dot Plot” which outlines their expectations for the Fed funds rate the end of 2023, 2024 and 2025. In March they estimated end of year 2023 a 5.10%, end of year 2024 at 4.3%, and end of year 2025 or 3.1%.
Fed chair Powell will have a press conference starting at 2:30 PM ET.
The weekly mortgage application data was released earlier today and showed increases from the previous week:
- The MBA Mortgage Applications recorded a 7.2% increase, rebounding from the -1.4% seen in the previous period.
- The Mortgage Market Index rose to 208.8 from the prior level of 194.7.
- The MBA Purchase Index, which measures home loan applications, increased to 163.2 from 151.7 in the previous period.
- The Mortgage Refinance Index, an indicator of home mortgage refinance activity, increased to 434.1 from the previous period’s level of 409.7.
- The average interest rate for a 30-year mortgage slightly declined to 6.77%, down from 6.81% in the previous period
At the bottom of the hour, the US PPI data will be released, and later at 10:30 the oil inventory data will be released. Below are the expectations:
- Final Demand Year over Year (YoY) was expected to decrease to 1.5% from the prior value of 2.3%.
- Final Demand Month over Month (MoM) was expected to decrease to -0.1% from the prior value of 0.2%.
- Ex Food and Energy YoY was expected to decrease to 2.9% from the prior value of 3.2%.
- ExFood and Energy MoM was expected to remain steady at 0.2%.
- Ex Food, Energy, and Trade YoY was expected to remain steady at 3.4%.
- Ex Food, Energy, and Trade MoM was also expected to remain steady at 0.2%.
Oil Inventory:
- The EIA Weekly Crude Stock as of June 9th was expected to decrease to -0.510 million barrels from the prior value of -0.451 million barrels.
- The EIA Weekly Distillate Stock as of June 9th was expected to decrease significantly to 1.208 million barrels from the prior value of 5.075 million barrels.
- The EIA Weekly Gasoline Stock as of June 9th was expected to decrease to 0.316 million barrels from the prior value of 2.746 million barrels.