Fed Minutes and Employment Start the Third Quarter
With the first half of the year in the rearview mirror and many questions still looming for the next six months, the markets will get some key information during this holiday-shortened week.
On Thursday, the minutes from the Fed’s June meeting will be released. The minutes should give a better read on the thinking of the Fed’s rate increase and, more importantly, the change in expectation to four rate hikes in 2018 versus three. I will be looking to see if any mention of the escalating trade tensions and the implications for the economy and monetary policy made the minutes.
On Friday, the Labor Department will release June employment data. I expect employment gains to continue their upward trend from the first half of the year. The expectation is for almost 200,000 new jobs to be added, while the unemployment rate is expected to remain at 3.8%. This is the second lowest unemployment rate since 1969. Last month, average hourly earnings increased by 0.3%, and economists expect another 0.3% increase in June.
Two wildcards present themselves this week: news surrounding the Friday implementation date for tariffs on Chinese goods, and rising oil prices due to supply fears. I expect trade and oil to be much discussed topics this week.
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