Weekly Market & Economic News Recap (Week of July 10, 2023)

• Inflation eased to 3% in June, slowest pace in more than two years. Fed officials are still likely to raise interest rates when they meet later this month. (Wall Street Journal, July 12, 2023, https://www.wsj.com/articles/consumer-price-index-report-june-inflation-ede7f4b1?mod=economy_more_pos4)

• As inflation goes down, soft landing odds improve. Latest data suggest a lot of past inflation was transitory. (Wall Street Journal, July 13, 2023, https://www.wsj.com/articles/as-inflation-goes-down-soft-landing-odds-improve-5166e6af?mod=economy_lead_pos3)

• Tech stocks lead market higher after inflation falls. Waning interest-rate fears drive dollar, bond yields lower. (Wall Street Journal, July 13, 2023, https://www.wsj.com/articles/global-stocks-markets-dow-news-07-13-2023-23da5138?mod=markets_major_pos11)

• Many officials signaled in recent speeches and interviews that they support a quarter-percentage-point increase that lifts interest rates to a 22-year high. (Wall Street Journal, July 14, 2023, https://www.wsj.com/articles/the-real-fed-debate-this-month-what-would-prompt-a-rate-hike-this-fall-a7e9f83e?mod=economy_lead_pos2)

• Big-bank earnings show signs of soft landing. Profits from JPMorgan, Wells Fargo make it easy to forget there was a banking crisis this year. (Wall Street Journal, July 14, 2023, https://www.wsj.com/articles/jpmorganchase-jpm-q2-earnings-report-2023-8694176b?mod=markets_major_pos10)

• Big banks are finally giving depositors a cut of windfall from fed hikes. Top US lenders previously showed restraint in rewarding savers. Now their deposit costs are surging as they earn more on loans. (Bloomberg, July 14, 2023, https://www.bloomberg.com/news/articles/2023-07-14/big-banks-are-finally-giving-depositors-a-cut-of-fed-windfall?srnd=null)

• US consumer sentiment jumps to near two-year high on job market. University of Michigan index climbed to 72.6 in early July. Short-term inflation expectations edged up to 3.4% from 3.3%. (Bloomberg, July 14, 2023, https://www.bloomberg.com/news/articles/2023-07-14/us-consumer-sentiment-jumps-to-highest-in-nearly-two-years?srnd=null)

• White House economists defend industrial policy in new paper. Document says key sectors suffered from decades of neglect. GOP critics says Biden’s agenda will drive up national debt. (Bloomberg, July 14, 2023, https://www.bloomberg.com/news/articles/2023-07-14/white-house-economists-defend-industrial-policy-in-new-paper?srnd=null)

• Economists are cutting back their recession expectations. Forecasters still expect GDP to eventually contract, but later, and by less, than previously. (Wall Street Journal, July 15, 2023, https://www.wsj.com/articles/economists-are-cutting-back-their-recession-expectations-74118938?mod=economy_lead_story)