ECONOMIC WEEK AHEAD: June 16–20

The moment Fed watchers have waited for is finally here—albeit with less drama than many believed a few weeks back. As we've long said, the two-day June Federal Open Market Committee meeting (Tue-Wed) should come and go with the federal funds rate still in the 4.25%-4.50% range that it's been in since December. Even as headline inflation measures appear to moderate, the robust labor market, evidenced by May's 4.2% unemployment rate, leaves Fed Chair Jerome Powell with little urgency to ease. 

For one thing, President Donald Trump doesn't seem as ready to pivot away from his trade war as hoped. This week or next, Trump's Tariff Turmoil (TTT) could get a second wind as the White House previews "unilateral" import taxes. For another, the quick escalation in the conflict between Israel and Iran has oil prices surging. So, between TTT and the possibility that the Strait of Hormuz might be shut down, questions abound about GDP and inflation dynamics everywhere.