FED: Atlanta's Bostic: Patient Stance Predicated On Solid Labor Market

Cleveland Fed President Hammack (non-2025 voter, hawk) reiterated her patient approach to any future policy easing in an interview with Fox Business Monday.

• To put the following quotes in context, she has previously cited a wide range of estimates of neutral rates from 2% to 4.6%, and it's not surprising she's not supporting a July cut (leaving Board members Waller and Bowman firmly in the minority on that front, apparently):
• "I do think we're pretty close to where the neutral rate is and so I see an economy that's resilient. I see one that's working really well, and I don't see a need to really reduce [interest rates] unless we see material weakening on the labor side...The modestly restrictive stance that we have right now is important because inflation is still running above our target."
• "I think wait and see is the best place for us to be because I think we don't know exactly what [tariff] impacts are going to be...I think it's important that we wait and see how all of the new policies that have been put forward are going to impact inflation" because "we're not there yet on the inflation side of the mandate."

• RES 4: 149.28 High Apr 3
• RES 3: 148.65 High May 12 and a reversal trigger
• RES 2: 148.03 High Jun 23
• RES 1: 147.62 High Jul 14
• PRICE: 147.60 @ 16:04 BST Jul 14
• SUP 1: 145.76 Low Jul 10  
• SUP 2: 145.11 50-day EMA
• SUP 3: 144.23/142.68 Low Jul 7 / 1
• SUP 4: 142.12 Low May 27 and a key short-term support  

USDJPY pressed higher again through the Monday close, keeping a short-term bull cycle intact. The pair has recently breached resistance at the 50-day EMA, highlighting a stronger reversal. Note too that 146.77, 76.4% of the Jun 23 - Jul 1 bear leg, has also been cleared, exposing 148.03, the Jun 23 high. Support to watch is 145.20, the 50-day EMA. A clear breach of the average would be bearish.

We've just published our preview of the June CPI report - Download Full Report Here

• Consensus sees core CPI inflation at a seasonally adjusted 0.3% M/M in June on a rounded basis, but with sizeable risk of undershooting at 0.2% (MNI median unrounded estimate at 0.24% M/M /average 0.25%).
• This would mark an acceleration from 0.13% M/M in May, with core services ticking up and core goods more than reversing May’s unexpected M/M deflation. Headline CPI meanwhile is seen at 0.3% M/M or 0.25% M/M unrounded after 0.08% in May, amid a bounce in gasoline-driven energy prices.
• It’s possible that June’s report will only be starting to show the delayed impact from the April reciprocal tariffs with the largest impact perhaps only to be seen in July. There appears a rough consensus of three months from tariff implementation to more notable consumer price increases.
• Goods will be in particular focus as tariffs are seen having an increasing influence on inflation as the summer unfolds. Categories to watch include apparel, communications/recreational goods, and furniture.
• In services, OER is seen steady with rent CPI picking up, while travel-related categories are seen remaining a drag. Supercore inflation was particularly subdued in May at 0.06% M/M and the estimates we’ve seen on average look for an acceleration to 0.23-0.24% M/M.
• It's unlikely that a downside inflation surprise would persuade the Federal Reserve to seriously consider cutting rates at its next decision on July 30, given the expected ongoing pickup in tariff-related prices.
• But a continued lack of evidence that tariffs are having an outsized effect on consumer prices would certainly help lay the groundwork for a resumption of easing in September.
• Headed into CPI (Tue) and PPI (Wed), the Fed’s preferred Core PCE gauge is seen at 0.25-0.26%.