John Hancock: Weekly Market Recap Week Ended June 11th

Price pressures 

An index of U.S. consumer prices rose at a 5.0% annual rate in May, the steepest increase since 2008. The latest monthly inflation spike extends a trend that accelerated earlier this spring, although the increases are being boosted in part by comparisons with relatively low inflation a year ago, when the pandemic depressed prices.

Meandering market

A measure of investors’ expectations of short-term stock market volatility fell to its lowest level since the pandemic began. The Cboe Volatility Index on Friday slipped below 16—the lowest since February 2020, before the pandemic triggered a surge in volatility.

Recovery indicators

On Thursday, the latest weekly report showed that new claims for unemployment benefits fell to 376,000, the lowest level recorded since the pandemic hit. On Friday, an index of consumer sentiment rose more than expected as survey participants grew more optimistic about future economic growth and employment.

Fed ahead

Inflation concerns could be top of mind for many U.S. Federal Reserve officials as policymakers hold a two-day meeting scheduled to end on Wednesday. While the Fed is expected to keep its benchmark interest rate unchanged—and at a near-zero level—the recent spike in consumer prices could spur discussion of other steps to tighten monetary policy.