Growth impetus fades

<p>Kia ora,</p><p>Welcome to Thursday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.</p><p>I'm David Chaston and this is the International edition from Interest.co.nz.</p><p>Today we lead with news that, apart from fossil fuels, we are seeing a broad retreat in most commodity prices today.</p><p>And first, even though the slip was small last week, American <a href="https://www.mba.org/news-and-research/newsroom/news/2022/05/25/mortgage-applications-decrease-in-latest-mba-weekly-survey" target="_blank"><strong>mortgage applications fell</strong></a> again week-on-week taking this downward trend to nine of the past twelve weeks. Benchmark mortgage interest rates fell for a second straight week.</p><p>April data for American <a href="https://www.census.gov/manufacturing/m3/adv/pdf/durgd.pdf" target="_blank"><strong>durable goods orders</strong></a> came in marginally softer than expected. They rose +0.4% month-on-month to US$265 bln in April, following a downwardly revised +0.6% rise in March. They are now +10.5% higher than a year ago. This is a sign business spending moderated somewhat. In a good positive sign, orders for capital goods rose more than +14% year-on-year in a rising trend.</p><p>The release of the <a href="https://www.federalreserve.gov/monetarypolicy/files/fomcminutes20220504.pdf" target="_blank"><strong>May US Fed minutes</strong></a> revealed that most of their policymakers judged that +50 bps increases in the fed funds rate would be appropriate at the next couple of meetings. They also recorded that a twist to a restrictive stance of policy may well become appropriate, and the timing of that shift will depend on the evolving American economic outlook. There is an urgency here that they want to recover lost ground as inflation has burst on them faster than they expected. But markets seem unconvinced of their commitment, especially as those minutes hinted a late 2022 pause may be needed.</p><p>The American federal <a href="https://www.cbo.gov/system