1. The FOMC kept the Fed funds target range unchanged at 3.5%–3.75%, as expected.

• Governor Stephen Miran dissented again in favor of a 25 bps cut, while Presidents Beth Hammack, Neel Kashkari, and Lorie Logan soft dissented by not supporting “inclusion of an easing bias in the statement.”

• Revisions to the statement were modest. Job gains are now deemed to “have remained low, on average,” rather than just “remained low,” in a nod to the March pickup in payrolls. Inflation is now “elevated” not “somewhat elevated,” and only “in part” due to the rise in energy prices.

– LLM-based sentiment score for the statement tilted in the hawkish direction.

• The markets also perceived the FOMC decision to be hawkish.

– Rates markets are no longer pricing for cuts in 2026.

– The dollar strengthened.

2. Durable goods orders rose by a solid 0.8% month over month, topping expectations.

– Underlying details were also strong, with orders excluding transportation rising by a robust 0.9%.

– Core capital goods orders, a proxy for business investment, surged by 3.3%, the highest since June 2020.

– Here is a look at nominal and real capital goods orders (levels).

• Core capital goods <i>shipments</i> have been strong.

– Shipments of computers and electronic products, in particular, continued their solid expansion.

3. Let’s look at some updates from the housing market.
• Housing starts rebounded, well above expectations, suggesting near-term construction strength.

– However, building permits fell sharply, signaling a likely slowdown in construction activity ahead.

• Mortgage applications edged up, …

… while the mortgage rate was little changed (+2 bps).

– Refinancing activity eased slightly.

4. The goods trade deficit widened more than expected, reflecting rising imports of autos and consumer goods.

5. Wholesale inventories rose at the fastest pace since June 2022, well above expectations.