MacroEdge 6/16 Weekly Report: "Welcome to Summer: A Summer of Likely Policy Errors Ahead, MacroEdge Vision Update"
A brief discussion amid a lull in data discussing the Fed's commitment to hold 'too high for too long', our expectations for an increase in the unemployment rate by year end, & Vision update.
Welcome to Summer: A Summer of Policy Errors (@DonMiami3, MacroEdge Chief Economist)
Good Sunday evening everyone,
As we approach the start of summer this week, we have a holiday on Wednesday (Juneteenth) and the markets will be closed. The next holiday following that will be the fourth of July. June 19th will really swing us into the full ‘summer swing’ of things, which is a lull before the next major earnings season that will kickoff at the end of July. Tomorrow we will have the latest data dashboard pushed through to the dashboard at MacroEdge.net in the ‘My Account’ section - so keep an eye out for that and the new datasets that are included on there.
On my end, I just returned from a quick trip down to Mexico myself, for a nice Father’s Day trip. Very ready to get back in the action with more data and news on our end in the weeks to come. Based on how quick these first two quarters of the year have already come and gone, I am expecting no less of the next two quarters. Time really is flying.
On the MacroEdge front - we’ve set the rollout for MacroEdge Global - our data and research coverage for the last week of July. Beyond that - the team is building the entire infrastructure and framework for the rest of our 2025 Vision, which will be discussed following the release of our global data and research line. MacroEdge TV and our media line will have more to come in the next few weeks, led by Ulysses Awsumb, so stay tuned for more announcements there as well. All in all, I am expecting an exiting second half of the year for our team, community, and our offerings as we continue our driven-by-data mission.
Tonight will be shorter than usual due to a lull in data, but this dynamic will switch in the next two weeks. Next weekend we will be able to discuss the latest retail sales, manufacturing, and state level employment data that will be released by the BLS. I expect to see cooling in some of the larger Sunbelt states (Florida/Texas) in particular, given the latest job cuts data there.
In this weekly report, we’ll discuss the following:
> The Week Ahead > Discussion on the Current Economy
> The Fed’s Decision & Summer Thoughts
> Technical Update
The Week Ahead
Monday:
Tuesday: Retail Sales, Industrial Production,
Wednesday: Juneteenth
Thursday: Housing Starts, Claims, Philly Fed Mfg. and Employment Data
Friday: Existing Home Sales for May
Discussion on the Current Economy
The current economy continues to provide us with a lot of mixed signals. The real signal that we’ve tracked closest for the last 9 months now has been the employment market. At the end of the day - this will be what pushes a further slowdown in the economy and the Federal Reserve appears poised to continue weakening the labor market in months to come remaining restrictive for too long given lagging shifts in the inflation data. Shelter and service inflation remain the two standout elevated inflation points, which will result in the Fed staying ‘hawkish’ - used loosely here - in contrast with other central banks around the world. In our timeline of rate cuts around the globe, I anticipate that the Bank of England will be the next to lower rates this week, followed by the Reserve Bank of Australia, New Zealand, and then us. If the employment data really weakens abruptly (which I don’t see as a June event) then this may accelerate the Fed’s timeline to a July instead of September cut. With the next earnings season coming into play I think we are currently looking at a September rate cut, particularly if job cuts begin to accelerate.
