Despite Federal (Fed) Reserve Chair Jay Powell’s dovish commentary during last week’s post-Fed meeting press conference, the subsequent equity market rally quickly evaporated as the S&P 500 Index moved deeper into bear market territory by week's end. Investor concerns are mounting that the Fed will not be able to orchestrate a soft landing with inflation continuing to run so hot. The Biden administration is desperately looking for some good news before the midterm elections and is considering a gas tax holiday to help provide some relief to consumers paying high prices at the pump.
The holiday-shortened week’s economic calendar will be highlighted by another update on the impact of higher mortgage rates on the housing market as Existing Home Sales comes out today. Friday’s University of Michigan consumer sentiment release will also be closely watched with the initial June number registering the lowest level on record.
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