At the FOMC meeting the Fed made a slight policy change to prevent its balance sheet from shrinking. No changes to rates were made and the Fed maintained that exceptionally low levels were warranted for an extended period. The Fed noted that with the pace of economic recovery more modest than previously anticipated, and to support further recovery, they will keep the balance sheet constant by reinvesting proceeds of principal payments from mortgage-backed securities into Treasuries. Details from Bloomberg...
The preliminary reading on 2Q nonfarm productivity fell at a 0.9% annual rate, compared to the forecast of a 0.1% increase. Unit labor costs rose 0.2%, versus an increase of 1.5% that was estimated.
Wholesale inventories for June increased 0.1% month-over-month, below the 0.4% advance that economists had forecast. The inventory-to-sales ratio—the amount of time it would take to deplete inventories at the current sales pace—increased from 1.14 months to 1.15.
The Dow Jones Industrial Average lost 54 points (0.5%) to 10,644, the S&P 500 Index was 7 points (0.6%) lower at 1,121, and the Nasdaq Composite fell 29 points (1.2%) to 2,277. Crude oil fell $1.23 to $80.25 per barrel, while the Bloomberg gold spot price gained $2.90 to $1,204.25 per ounce.
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