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Here’s what we’ve got for you today:

1. This Week in a Nutshell 🥜

2. Is a September Cut Still on the Table? 🍵

By the way, this article on June Fed Meeting is the most clicked link in this newsletter, you should check it out if you are interested.

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[Read Time 2-3 min]

Rates Today 📈

This Week in a Nutshell 🥜

Last week, as expected, was completely uneventful. We had moderate movement day to day, but if zoomed out, there was no movement in buyer’s interest rates.

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This week: we have two pieces of economic news: GDP (Thur) and PCE (Fri) - the latter being the market mover.

Expect little volatility at the beginning of the week, we should stay in the 6.875% - 7% range we have been in for the last 10+ days.

• Thursday - Q1 GDP is released which will show investors how the economy was doing at the beginning of the year. The forecast is a continued slowdown in GDP growth.

Unless the numbers are much different than the forecasts, this report may not move the needle too much.

• Friday - PCE (Personal Consumer Expenditure) measures what consumers are spending their money on. The Fed typically uses this report as one of the pillars to predicting inflation. The lower the PCE, the less consumers are spending and pumping into the economy. A high PCE is inflationary, which is not what we want to see.

In the last three PCE prints, we have seen a dip in interest rates the day of the print. If that trend continues, we may see us buck the 6.875% trend and start making our way to 6.5% in the interest rate market.

Is a September Cut Still on the Table? 🍵

The short answer: Yes - it is still possible to see the first rate cut in September.

The CME Group is one of the best predictors at Fed policy decisions - they are currently projecting a rate cut in September with a 67% likiehood.

What needs to happen?

• Circle July 11th on your calendar - this is the next CPI print. This moves markets. If we have any chance of getting a cut in September, CPI needs to come in at or below forecasts.

Thanks for reading - that is all we have for today 😎

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— Michael F DiLucchio