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Week In Review

FOMC Minutes and Powell Testimony

This week the Federal Reserve Open Market Committee (FOMC) released the minutes from its June meeting. The minutes show a higher level of concern over the slowing economy. “Many participants” favored rate cuts if risks and uncertainties “continued to weigh on the economic outlook.” Only “some” Fed officials argued there was not yet a strong case for a rate cut. Testifying to Congress this week, Chairman Powell appeared to share the minutes’ dovish outlook, saying the economy has not picked up since the June meeting. The chairman also reiterated that the Fed stands ready to act as needed to sustain the expansion.

Our Take

The minutes reveal an even more dovish tone than conveyed in last month’s statement. Couple with Powell’s remarks to Congress and it is increasingly clear the Fed is ready and willing to move the fed funds rate lower. A rate cut at the July meeting appears likely with the potential of more cuts to follow later in the year.


Consumer prices rose 0.1% in June and have risen 1.6% over the past twelve months. Producer prices also rose 0.1% in June and are up 1.7% during the past year. Year-over-year, core consumer prices (excluding food and energy) are up 2.1%, while core producer prices have risen 2.3%.

Our Take

Inflation readings were a little higher than expected this month, but inflation remains contained. This report is unlikely to do anything to stop the Fed from cutting rates at their next meeting.


China’s imports in June declined 7% year-over-year driven by a 31% decline in imports from the U.S. and a 5% decline in imports from the rest of the world. Exports from China also declined.

Our Take

These numbers indicate that the Chinese economy continues to slow after being a driver of global growth for decades. The current U.S. – China trade conflict is at least partially responsible for this slowdown, but even a speedy resolution of this conflict would be unlikely to completely restore Chinese growth to previous levels.

All expressions of opinions are subject to change without notice in reaction to shifting market conditions. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice.