Bonds & Stocks
Stocks fell on speculation major central banks will keep interest rates at elevated levels to tame inflation. The Nasdaq 100 underperformed major benchmarks. Federal Reserve officials paused their series of interest-rate hikes Wednesday, but projected borrowing costs will go higher than previously expected, owing to what Chair Jerome Powell called surprisingly persistent inflation and labor-market strength.
Economy
Recent jobless claims data support our view that the labor market is softer than it appears from headline data on payrolls, the unemployment rate, and job openings. However, the labor market hasn't softened enough to put the Fed at ease or alter the balance of risks. Seasonally-adjusted initial unemployment claims held constant at 262k for the week ended June 10, with seasonal factors offsetting an increase of nearly 29k new claims.
World
The European Central Bank lifted interest rates by another quarter-point, with President Christine Lagarde describing a further hike in July as "very likely." Less than a day after the Federal Reserve left borrowing costs unchanged following 10 straight increases, the ECB raised its deposit rate to 3.5% - the highest level in more than two decades and in line with the expectations of economists and traders.