Federal Reserve keeps interest rates unchanged, releases new economic projections
The Fed has just released new economic projections for 2019 through 2021, which were last updated in March. For 2019, projected GDP growth is unchanged at 2.1 percent, the unemployment rate edges down from 3.7 to 3.6 percent, and the PCE inflation rate falls from 1.8 to 1.5 percent. Notably, the Federal Funds rate remains unchanged at 2.4 percent for 2019, but is projected to be lowered to 2.1 percent in 2020. However, in its statement, the Fed removed the word “patient,” indicating that it may be willing to cut rates sooner should the global or national economy weaken. For now, it’s simply status quo.
Leading Economic Index flat in May, suggesting moderating growth ahead
The US LEI was unchanged in May, following three consecutive increases. Positive contributions from financial conditions and consumers’ outlook offset the weakness in stock prices and the manufacturing sector. While the economic expansion is now entering its eleventh year, the longest in US history, the LEI clearly points to a moderation in growth towards 2 percent by year’s end.
May new home mortgage purchases rose 0.1 percent from April but 20.1 percent year-on-year
Mortgage applications for new home purchases in May increased 20.1 percent compared from a year ago. Compared to April 2019, applications increased by 0.1 percent.