Top-of-mind economic news as we start the week:
— U.S. GDP grew at a 2.4% annualized pace in the 2nd quarter of 2023, indicating strength despite inflation and higher interest rates.
— The Fed increased its key interest rate 25 basis points (to 5.25% – 5.5%), to the highest level in 21 years, and signaled another increase possible in 2023.
— The Fed’s preferred inflation gauge (the core PCE Index) fell to 4.1% annualized in June from 4.6% in May; still twice as high as Fed’s 2% target.
— The Bank of Japan increased the range for yields on its 10-year bonds, an indication of potential reversal in its ultra-loose monetary policy.
— The European Council adopted laws aimed at reducing greenhouse gas emissions 55% by 2030 (from 1995 levels), targeting transport and energy usage.
