Economic data less flashy than tariff talks

It was an up-and-down week for US stocks and bonds, driven by the latest batch of on-again, off-again tariff headlines. 

Economic data was less noisy. Initial jobless claims fell slightly to 227,000 from 232,000 prior, though continuing claims increased modestly from the prior week. The labor market is still not “flashing red lights” to the Federal Reserve. 

The recently released June FOMC meeting minutes confirmed the group’s agreement that it was well positioned to wait for more clarity on the inflation and economic outlook. Still, most participants felt that “some” reductions in the fed funds rate would likely be appropriate this year. The market continues to price in two cuts later this year, but the backdrop is ever evolving. 

Key data this week includes June inflation readings, while second quarter earnings announcements kick off in earnest with the country’s largest banks.