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Week In Review

Powell Testimony

Fed Chairman Jerome Powell presented the Semiannual Monetary Policy Report to Congress this week. In prepared remarks, Powell gave a relatively upbeat assessment of the economy citing solid job gains and strong economic growth. In addition, he indicated the Fed forecasts the job market to remain strong and inflation to stay near 2 percent over the next several years. Powell did cite trade policies and tax legislation as among the uncertainties that could alter the Fed’s expectations, but he believes the risks to the outlook are roughly balanced.

Our Take

The Fed has forecast it will raise rates two more times in 2018, having already tightened its policy twice this year. Nothing stated in the hearings hints to a deviation from that stance.

Retail Sales

Retail sales rose 0.5% in June and May sales were revised higher, from 0.8% to 1.3%.

Our Take

Retail sales rebounded dramatically after a subpar first quarter. This is consistent with predictions for improved GDP growth in Q2 and represents another data point in favor of the Fed’s continued gradual tightening path.


The District of Columbia brought a $517 general obligation deal to market this week. This follows last week’s Moody’s Investors Service upgrade from Aa1 to Aaa. Moody’s cited the city’s “exemplary fiscal governance” along with a strong pension system as reasons for the upgrade. Standard and Poor’s had already upgraded the District of Columbia from earlier this month.

Our Take

In the 1990s, the District of Columbia had $3.5 billion of general obligation debt, a budget deficit and carried a junk rating. A Financial Control Board was appointed and stayed in place until 2001. Over the years, the District of Columbia has improved is fiscal health, has experienced a growing economy and has now been rewarded with the highest Moody’s rating.