The words from Fed Chair Warsh will be most interesting. Given his dislike of forward guidance, we are unlikely to get much in terms of policy bias but he will still be free to express his views on the economy and inflation. Data released yesterday certainly points to an economy weaker than some of the official data implies. The Conference Board Consumer Confidence report was much weaker than expected - the weaker reading and the downward revision to May meant that the 6-month average reading fell below the covid low and to a level not seen since 2014. This at a time of record highs for US equity markets and underlines the fact that not everybody is benefiting. The overall drag comes from the Present Situation index which fell to the lowest level since February 2021. That index is closely tied to the labour market, and the Labour Market Differential (jobs plentiful minus jobs hard to get) fell to the lowest level also since February 2021, when the unemployment rate was at 6.2%. The deterioration in labour market sentiment is certainly not consistent with a continued improvement in nonfarm payrolls and the 188k 3mth average looks likely to slow over the coming months.
The JOLTS job opening data was certainly more positive and near-term sentiment will be determined by the NFP print tomorrow. But consumers generally remain grim and that points to the non-AI economy remaining subdued. With inflation set to fall, we see current Fed rate hike pricing reversing and hence see limited scope for much extension to this period of US dollar appreciation.