What Happened last week…
The Federal Open Market Committee (FOMC) kept interest rates at 4.25% to 4.50%, as expected. The rate has been unchanged since December. According to the Fed’s dot plot, two quarter-point rate reductions are still expected by the end of 2025. The next FOMC meeting takes place July 29-30.
Federal Reserve Chairman Jerome Powell said, “For the time being, we are well positioned to wait to learn more about the likely course of the economy before considering any adjustments to our policies.” Regarding the potential impact of tariffs, Powell said, “It takes some time for tariffs to work their way through the chain of distribution to the end consumer. A good example of that would be goods being sold at retailers today may have been imported several months ago before tariffs were imposed. So, we’re beginning to see some effects, and we do expect to see more of them over the coming months.”
The Fed also updated its economic projections. For 2025, change in real GDP is expected to be 1.4%, the unemployment rate is expected to be 4.5%, PCE inflation is expected to be 3.0%, and core PCE inflation is expected to be 3.1%. For 2026, projections foresee change in real GDP of 1.6%, an unemployment rate of 4.5%, PCE inflation of 2.4%, and core PCE inflation of 2.4%.
Texas Instruments (TXN) is the latest company to bolster its investment into artificial intelligence, making a commitment of more than $60 billion to expand manufacturing in the United States. The investment “includes seven U.S. semiconductor fabs across three manufacturing mega-sites in Texas and Utah supporting more than 60,000 new U.S. jobs” and is the “largest investment in foundational semiconductor manufacturing in U.S. history.”
Eli Lilly (LLY) is set to purchase Verve Therapeutics (VERV), a clinical-stage company developing genetic medicines for cardiovascular disease, for up to $1.3 billion.
Meta Platforms (META) will introduce advertisements on WhatsApp, which has more than 3 billion monthly users. It will be the first time ads will run on the platform. Meta acquired WhatsApp in 2014.
Happening this week…
On Monday, existing home sales for May are expected to be 3.95 million. Meanwhile, on Wednesday, new home sales for May are expected to be 710,000.
On Thursday, the GDP growth rate (final estimate) for Q1 2025 is expected to match the second estimate of -0.2%.
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- The Rockline Team
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