We’ve just published our weekly Bespoke Report newsletter, which covers all of the topics you need to be aware of as an investor.  After a sharp bounce off the lows on 6/3, the S&P 500 stopped to refuel this week as it readies itself for some key events in the coming weeks that will likely help to steer the market’s direction into the end of the second quarter.  The first of those events (barring any surprising tweets from the President) is next week’s FOMC meeting where Jay Powell will be forced to reconcile the differences between what members of his committee have been saying and what the market is expecting for the July meeting.

On the one hand, economic data doesn’t seem anywhere close to warranting a cut in rates, but economic data is obviously backward looking.  Members of the FOMC will be forced to weigh the data with other factors like the message of the yield curve, falling inflation, and even more importantly, plummeting inflation expectations.  In addition to those factors, Fed officials must also weigh what’s going on with trade.  For starters, can rate cuts even do anything to offset the potential drag that comes from tariffs and a potential trade war?  In addition to that, a lot of the trade tensions can easily be undone just as easily as they were put into place.  What happens if the FOMC cuts rates and trade issues are worked out shortly thereafter?  Confused?  Just be thankful you don’t have to make the decisions!

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