We’re in luck this week. There are relatively few reports and decisions to watch.
But the Federal Reserve meeting, set for Tuesday and Wednesday, is a very big deal.
💵💰Don’t miss the move: Subscribe to TheStreet’s free daily newsletter💰💵
Not so much because of the decision the Fed will make, which most economists think will be to leave its key interest rate alone.
The other reports will add a little more detail on whether tariffs are hurting the domestic economy. Much of the economy is stable. But housing is struggling. And the uncertainty created by tariffs have affected some industries. Foreign tourism and travel to the United States have fallen off this year, particularly from Canada.
Is the Fed’s independence on line?
The overriding question is if the Fed, which has fiercely guarded its independence since 1951, will succumb to President Donald Trump’s demands that it obey his commands.
Related: Fed interest rate decision looms as battle over cuts takes surprising turn
The president has threatened to fire Chairman Jerome Powell multiple times because Powell and the Fed move slowly in making interest-rate decisions. (He’s learned he may not legally have the power. But he also knows Powell’s term as Fed chair ends next May.)
So, Trump regularly trashes Powell on Truth Social. The president wants the Fed to cut rates now because he worries the economy is slowing down or maybe falling into recession.
It’s a classic starting point of view from someone raised in real estate development: Rising interest rates are death.
The stock market nearly new highs last week before the Israeli attacks on Iran.
Oracle (ORCL) was up nearly 24% last week, tops among Standard & Poor’s 500 stocks. Airlines and cruise lines, such as Delta Air (DAL) and Carnival Corp. (CCL) , were lower.
The Fed’s point of view is that the Central Bank has two mandates: to promote maximum employment and stable prices. Employment has held mostly steady since 2022. Inflation will higher than the 2% a year the Fed wants.
The Fed’s decision, expected to be to leave its federal funds rate at 4.25% to 4.55% (or a blended 4.33%), will be announced at 2 p.m. Wednesday, and Powell is hold a news conference a half hour or so later.
The federal funds rate is what the Fed wants banks to charge one another for overnight loans needed to meet reserve requirements.
With the decision will be projections of where Fed officials see the economy and interest rates headed over the next few years.
More Economic Analysis:
- Hedge-fund manager sees U.S. becoming Greece
- A critical industry is slamming the economy
- Reports may show whether the economy is toughing out the tariffs
Also due this week
Manufacturing surveys in Middle Atlantic states. Will come from the Federal Reserve banks of New York and Philadelphia on Monday and Friday, respectively. Economist study these because they are more locally sourced.
U.S. retail sales for May, due at 8:30 am. ET Tuesday. This reports estimate how much stuff consumers are buying. The April report showed a 0.1% gain.
Industrial production and capacity utilization, due Tuesday at 9:15 a.m.. These reports show production trends and how much of U.S manufacturing capacity is used.
Home Builder Confidence Index, due at 10 a.m. Tuesday from the National Association of Home Builders. These have consistently shown builders are worried about sales levels and buyers’ ability to afford to buy a home.
Housing starts and building permits, due at 8:30 a.m. Wednesday. The data in this report gives a rough idea of new home construction: how much is built, where and for how much. It’s a key monthly report.
A note: There will be no reports on Thursday, June 19. That is the Juneteenth holiday, or, more formally, the Juneteenth National Independence Day. Government offices, financial markets, banks, and other businesses will be closed.
Related: Veteran fund manager sends dire message on stocks
