Third Quarter Off to a Good Start
· Although existing home sales retreated in June, new home sales rose to their highest level in five years. Orders for capital goods have now risen for four consecutive months, and the labor market appears to be holding up.
· Recent data are consistent with our forecast that real GDP growth in Q3 likely will be stronger than it was in Q2. We continue to project a moderate pace of economic growth in the coming quarters. With inflation benign and growth modest, the Fed likely will maintain monetary accommodation for the foreseeable future.