Mixed messages continue to be thrown off by the U.S. economy, and this week we can add retail sales and consumer inflation for May to the list of economic indicators that continue to disappoint analysts’ expectations.
- The three-month moving average on retail sales is running at about half the pace seen over the past 12 months.
- Inflation is showing signs of moderation after a sharp rebound in the first quarter.
- The combination of a somewhat less dovish Fed and diminishing growth and inflation expectations is compressing the Treasury yield to an extent that rivals the lows of the expansion.
- Bank credit has already tightened for CRE and auto lending, while loan demand has weakened pretty much across all segments.
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Our team believes geopolitics has taken center stage for financial markets and will likely be the main influence of direction over the short term.Read More ›
Beyond this quarter, the economic and policy outlooks are becoming cloudy again.Read More ›
Investors have gotten extremely comfortable with the economic environment and outlook — some would say the mood is positively complacent.Read More ›