Headlines discussed at LNWM’s Monday morning briefing:
— The Federal Reserve expects US GDP to drop 6% in 2020 before rebounding 5% in 2021; intends to keep its key short-term interest rate near zero through 2022 and pump $120 billion into the economy each month by buying bonds and mortgage-backed securities.
— US consumer confidence rose in May — to 78.9 on a key index vs. 72.3 in April — but still remains relatively low given US recession and uncertainty over economy.
— US import prices rose 1% in May after dropping 2.6% in April, mostly due to gas and food, easing fears of deflation.
— US mortgage applications for purchase rose 9.3% the week of June 5, a level that is 13% higher than a year ago, and the 8th straight week of increases.
— The UK’s economy shrank 20% in April and is expected to contract by 11% for all of 2020, with Bank of England ready to do more to provide more stimulus.
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