It is Thursday, June 11 and the market has plunged on worries of a second coronavirus wave and weekly unemployment claims were better than expected. We are also reading that U.S. wholesale prices rose 0.4% in May, led by food and energy and The Fed sees interest rates staying near zero through 2022. In addition, we see that there could be increased pressure put on retail banks as market forces and customer behaviors potentially change coming out of this crisis.
Stocks fell sharply on Thursday as coronavirus cases increased in some states that are reopening up from lockdowns. Shares that have surged recently on hopes for a smooth reopening of the economy led the declines.
The pace of unemployment claims declined again last week as the U.S. jobs market continued its plodding recovery from the coronavirus pandemic, Labor Department data showed Thursday.
U.S. wholesale prices rose 0.4% in May, led by gains in the cost of food and energy. The Labor Department said Thursday that its producer price index, which measures inflation pressures before they reach the consumer, showed an increase after three straight months of declines. Those declines had reflected in part the steep drop in demand caused by government-ordered shutdowns to deal with the coronavirus.
The Federal Reserve kept interest rates near zero and indicated that’s where they’ll stay as the economy recovers from the coronavirus pandemic. “We’re not thinking about raising rates. We’re not even thinking about thinking about raising rates,” Fed Chairman Jerome Powell said. “What we’re thinking about is providing support for the economy. We think this is going to take some time.”
As the economic fallout spreads, retail banks find themselves juggling some big priorities that require concrete steps to reposition now while also recalibrating for the future. They’re trying to manage revenue and customer expectations, despite near-zero interest rates and growing pressure on consumers. And, they need to keep an eye on strategy and brand issues that will define their future, as market forces and customer behaviors potentially change coming out of this crisis.