June 18, 2025
Heading into the decision, U.S. equity markets were higher, with the Dow Jones Industrial Average up as much as 290 points around 10:45am this morning Wall Street time. In addition, Treasury yields were lower with the 10-year Treasury yield as low as 4.35% around 11:00am. Following the Fed’s statement and news conference, stocks gave back gains and treasury yields moved slightly higher.
John Augustine, Chief Investment Officer, shares the team’s perspective on today’s market action:
- National economic activity reports slow in May. The three national economic activity reports were released this week, with all three – Retail Sales, Industrial Production, Housing Starts – coming-in lower than expectation. We cannot remember this happening since the Great Lockdown in 2020.
- Middle East tensions stable via oil market. The price of WTI crude oil moved slightly higher today, to $74.94 per barrel. This is the markets signal that tensions may be lessening in the Middle East, though no one knows what will transpire in the coming days.
- Fed stays in “wait and see” mode with SEP adjustments more worrying. The Federal Reserve Open Market Committee (FOMC) statement was reasonably similar to last month, while Fed Chair Powell’s news conference still showed a Fed that is waiting to see what implications the tariffs may have for inflation and/or the economy. In its quarterly Statement of Economic Projections (SEP), the FOMC members see real GDP lower in the +1.4% range this year (was +1.7%), but still with two Fed rate cuts projected this year. However, their estimate for inflation this year rose from 2.8% to 3.1% and the Unemployment Rate projection moved up slightly from 4.4% to 4.5% (current = 4.2%).
Our Perspective:
We remain focused on looking out for our customers and communities. Much like the Fed, our Chief Investment Office acknowledges there is a significant level of uncertainty in the economy and markets and continue to invest with an eye towards balance & diversification. If you are concerned about your investment portfolio or any other part of your financial life, please reach out to your Huntington team. We are all here to help
