The Economic Week Ahead: June 10-14

The economic week ahead will be dominated by the FOMC’s latest meeting (Wed) and May’s CPI report. The FOMC is widely expected to keep the federal funds rate (FFR) target range between 5.25% to 5.50% on Wednesday. The committee will also release its latest Summary of Economic Projections (SEP) showing the participants’ median forecasts for real GDP, the unemployment rate, the inflation rate, and the FFR.

We expect that Fed Chair Jerome Powell will push back on market expectations for the Fed to cut interest rates this year. The SEP might be changed to signal one rate cut at most this year rather than 2 to 3 cuts. We think the economy can handle rates at these levels and cutting preemptively would be a mistake because it would fuel a stock market meltup.