The Economic Week Ahead: June 24-28

The key indicator everyone's watching this week is May's PCED (Fri). We expect the Fed's preferred inflation gauge will continue to show progress toward its 2.0% target. The labor market may also take center stage this week.

If weekly jobless claims (Thu) increase sharply after falling 5,000 to 238,000 in the June 15 week, the 10-year Treasury yield would likely dip below 4.20% while stocks might jump on hopes the Fed will cut interest rates sooner rather than later (chart). We think initial claims will stay relatively low below 250,000, and we still expect no rate cut this year. Here's our take: