This Week
The Federal Reserve was in the spotlight this week, with several key events including the June jobs report, Fed Chair Kevin Warsh’s first remarks since the Federal Open Market Committee meeting on June 17, and a Supreme Court decision stating that Fed Governor Cook cannot be fired for now.
The jobs report was underwhelming, showing an increase of only 57,000 jobs in June, which is just half of what was expected. Additionally, the job numbers for the previous two months were revised downward by a total of 74,000 jobs. Nevertheless, the labor market remains relatively strong, with an average monthly gain of 92,000 jobs over the last six months, marking the highest average since early last year.
Chair Warsh expressed his concerns about inflation, emphasizing that anyone expecting the Fed to allow inflation to exceed its 2% target would be “disappointed.” However, he also mentioned that inflation risks have decreased in recent weeks. Following the weaker jobs report, the market now anticipates around 30 basis points (bp) in Fed rate hikes this year, down from 35bp earlier in the week.
Besides the Fed, this week also featured news on trade deals and progress in negotiations with Iran.
For the week, the Nasdaq-100® remained mostly unchanged, while the yield on 10-year Treasury notes increased by about 10bp to 4.5%.
Next Week
Here are the key events I’m keeping an eye on next week:
Monday:
ISM Services PMI (June)
Wednesday:
Fed Meeting Minutes (June)
Thursday:
Jobless Claims (Week Ending July 4)
