U.S. Review
Inflationary Pressures Mounting, But Fed Holds Tight
• Both headline and core CPI posted large gains in May. Meanwhile, the Fed downplayed rising inflation and generally maintained its previous outlook for monetary policy.
• Industrial production came in stronger than expected, making the factory sector look healthier after the harsh winter hampered activity.
• The pace of residential construction is struggling to move higher, with permits and starts falling in May.
Global Review
Economic Activity in Major Economies Resilient in Q2
• Data released this week showed that economic activity in most major foreign economies continues to expand at a modest rate in Q2. Retail spending in the United Kingdom has been solid over the past three months, and output in the Eurozone construction sector is starting to trend higher.
• Retail spending in Canada jumped in April, and the CPI inflation rate rose to a two-year high. That said, inflation remains within the Bank of Canada’s target range, and we believe that the Bank will remain on hold until the early part of next year.
Read the full report: Economic Research