TLDR
- Federal Reserve meets Wednesday with no rate changes expected, but investors watching for updated “dot plot” projections on future rate cuts
- Tesla robotaxi service could launch in Austin as early as Sunday, June 22, marking a key milestone for the EV maker’s AI strategy
- Middle East tensions escalate after Israeli airstrike on Iran sends oil prices surging over 12% for the week
- May retail sales data due Tuesday will show if consumer spending remains strong despite economic headwinds
- Markets closed Thursday for Juneteenth holiday, with light earnings schedule featuring Lennar, Accenture, Kroger, and CarMax
Markets face a packed schedule this week as the Federal Reserve prepares to announce its latest interest rate decision and Tesla moves closer to launching its robotaxi service. The week also brings crucial retail sales data and continued focus on Middle East tensions that sent oil prices soaring.
The Federal Reserve concludes its two-day meeting on Wednesday with no rate changes expected. Investors overwhelmingly believe the central bank will keep rates at current levels between 4.25% and 4.5%.
The real focus will be on the updated Summary of Economic Projections, including the “dot plot” that shows policymakers’ rate expectations. Fed Chair Jerome Powell will hold a press conference at 2:30 p.m. ET to discuss the central bank’s economic outlook.
Fed Under Pressure Despite Steady Stance
Recent inflation data came in lower than economists expected, putting pressure on the Fed to consider cuts. May consumer prices rose 2.4% annually, showing continued cooling from earlier highs.
Bank of America economists argue this reduces stagflation risks and increases chances of “good” rate cuts driven by solid employment and slowing inflation. Markets currently price in two rate cuts for 2025, matching the Fed’s March projections.
President Trump has publicly urged the Fed to make a one-point rate cut. However, officials maintain they’re monitoring inflation data for signs that tariffs are driving up prices before making any moves.
๐๐จ๐ฆ๐ง ๐๐ก: ๐บ๐ธ President Trump calls for the Fed to cut interest rates by one full point. pic.twitter.com/gw6Vm8udF4
— Lark Davis (@TheCryptoLark) June 11, 2025
Tuesday’s retail sales report for May will provide key insights into consumer health. Economists expect overall sales fell 0.6% monthly, but sales excluding auto and gas likely rose 0.4%.
The retail sales control group, which feeds into GDP calculations, is forecast to gain 0.5%. Wells Fargo economists say the data will likely show “the consumer has yet to run out of steam.”
Tesla Robotaxi Service Nears Launch
Tesla CEO Elon Musk announced the company could roll out its robotaxi service in Austin, Texas, as early as Sunday, June 22. The timeline could shift as the company maintains “super paranoid” safety standards.
BREAKING:
THE FIRST EVER TESLA ROBOTAXI WITH NO ONE IN THE DRIVER SEAT WAS JUST SPOTTED IN AUSTIN
Robotaxi is printed on the side of the car ๐$TSLApic.twitter.com/TK39Tojhzq
— Dalton Brewer (@daltybrewer) June 10, 2025
The robotaxi launch represents a pivotal moment for Tesla’s artificial intelligence strategy. The company is betting on self-driving technology to become a major part of future transportation.
Goldman Sachs analysts believe Tesla has advantages over competitors through its AI development capabilities and ability to scale production quickly. The service could validate the company’s transition from primarily an electric vehicle manufacturer to a technology company.
Middle East tensions continue weighing on markets after an Israeli airstrike on Iran. Brent crude futures surged to nearly $74 per barrel, while West Texas Intermediate reached almost $73.
JPMorgan analysts warn that severe escalation could push oil to $120 per barrel and drive consumer prices up to 5%. Bank of America strategists say the door remains “wide open for stock bulls” if oil price increases prove short-lived.
Housing data will also be scrutinized this week. Tuesday brings the NAHB housing market index, while Wednesday features building permits and housing starts data.
Homebuilder confidence remains depressed due to affordability issues. Construction data will show whether builders are addressing housing inventory shortages.
Markets close Thursday for the Juneteenth holiday. Corporate earnings remain light, with reports expected from Lennar on Monday, Accenture and CarMax on Friday.
Lennar previously warned of housing market weakness in its prior quarter. Both Accenture and CarMax reported lower-than-expected profits in their recent results.
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