The economic expansion continues to be vibrant. Labor markets continue to generate new jobs. Housing markets have also helped fuel job creation and economic growth. Despite rising mortgage interest rates, new and existing home sales set new record highs in May. While mindful of recent mild accelerations in inflation measures, the Federal Reserve decided to increase short-term interest rates in light of its view that economic growth is robust, labor markets are continuing to strengthen, and idle capacity is shrinking. Energy prices have receded recently in the absence of major new international tensions. The economic outlook continues to be rosy; private forecasters expect continued robust job and economic growth.