Interest rate volatility observed in the first quarter continued
into the second quarter of 2018. Base rates peaked in May and then
retreated somewhat in June as trade tensions increased.
Economic indicators continued to point to increased economic
expansion as the U.S. producer price index (PPI) and consumer
price index (CPI) showed the largest respective increases in over
six years. Further the latest second-quarter estimate of real gross
domestic product (GDP) growth indicated a nearly 4% increase.
In light of continued economic expansion, the Fed hiked interest
rates an additional quarter-point in June and increased guidance
toward two additional quarter-point rate increases in 2018 (to a
total of four in 2018) and three quarter-point hikes in 2019.
