Treasury
Federal Reserve Governor Christopher Waller warned on Monday that with inflation continuing to run above the 2% target and the labor market stabilizing, the Fed may need to raise the benchmark interest rate in the near term. He cited the core PCE inflation rate rising from 3% in December 2025 to 3.4% in May 2026 as evidence, and noted that if core inflation data come in higher again this week, the FOMC will consider tightening policy. Market expectations for the probability of a rate hike in July have risen from 34.2% last Friday to 43.3%.
Data from the Deel HR platform and a16z shows that most employees globally take only one day off at a time, with France leading at an average of 28 days per year and the United States at only 16 days. Brazil has segmented leave due to legal requirements, while nearly a quarter of U.S. employees take no time off all year.
The latest Kitchen Table Project survey reveals that rising prices for groceries, gasoline, and other goods have caused widespread economic pressure across all segments of U.S. consumers. 67% of respondents noted that meat and poultry prices are especially difficult to afford, and nearly four times as many respondents attributed the cost-of-living crisis to rising prices rather than stagnant wages.
The University of Michigan's consumer confidence index rose 10% in June from May's historic low, mainly due to easing tensions in the Iran war driving down gasoline prices. One-year inflation expectations edged down to 4.6%, but remain well above pre-war levels.
U.S. consumer spending rose 0.7% month-over-month in May, but inflation accelerated to its fastest pace in three years. The PCE price index increased 4.1% year-over-year, and core PCE rose 3.4% year-over-year. Despite low consumer confidence, income growth supported spending, and GDP expectations were revised up to 2.5%.
S&P Global's June survey shows that US manufacturing expanded at the fastest pace since July 2021, with new orders reaching a four-year high, but factory layoffs (excluding the pandemic period) were the largest since 2009. Service sector growth was weak, showing a divergence in the economy.
In a report released in June, KPMG stated that after surveying 2,024 executives, it found that only one in five companies can quantify the financial impact of sustainability, with most companies having "blind spots" and significant differences across industries.
Data released Thursday by The Conference Board showed that the U.S. leading economic index rose 0.1% month-over-month in May, driven by stronger stock markets and a narrowing interest rate gap, marking a second consecutive month of growth. However, the organization warned that consumers are cutting back on spending due to rising everyday costs, and economic growth is expected to slow from 2.1% in 2025 to 1.8% in 2026.
The Federal Reserve kept interest rates unchanged at its June meeting and removed language in its policy statement about possible future rate cuts, suggesting that the next rate adjustment could be a hike.
The University of Michigan's June consumer confidence index rose 9% month-over-month, ending a four-month decline, driven mainly by the average gasoline price falling from $4.50 to $4.11 per gallon. Despite short-term sentiment improvement, concerns about persistently high inflation persist, and the overall economic assessment remains subdued.