The surge in inventories raises the risk that firms will be caught with excess supplies just as demand begins to slow down this year.
We expect the Fed to raise its policy rate above 5% in the near term while at the same time reducing its balance sheet by $95 billion per month.
The Federal Reserve increased its policy rate by 75 basis points on Wednesday to a range between 3.75% and 4% as it hinted at slowing the pace of its hikes.
There were 1.56 million new housing starts in June on an annualized basis, a 2.0% decline from May and the lowest level since last September.
The RSM US Manufacturing Outlook Index declined into negative terrain in May, signaling the impact of high inflation, rising interest rates, the lockdowns in China and the war in Ukraine.