OIL: CPC Crude Exports Rise in July: Bloomberg

The MNI Markets Team's educated "guess" as to the June SEP submissions for the 2025 end-year dot is below. Note the median for end-2025 is 3.9% (2 cuts).

• Kashkari and Bostic have publicly revealed their "dots" for 2025 (and the case of the latter two, 2026), while Daly and Collins have implied theirs.
• Most of the Board are in the 2-cut median camp. Governors Cook and Jefferson haven't commented on monetary policy since the June FOMC meeting. At a guess, Gov Kugler is only board member who doesn't eye cuts this year, though that could also be Gov Barr, or Gov Cook who said pre-June FOMC that all possibilities, including hikes, were possible.
• Two of the more hawkish members, St Louis's Musalem (2025 voter) and Dallas's Logan (2026 voter) also haven't spoken on current monetary policy since the June meeting, though are scheduled to make relevant commentary on July 10 and July 15, respectively. We assume they are "no-cutters" for this year.
• We also haven't heard from new Philadelphia Fed President Anna Paulson (2026 voter) yet, though her predecessor Patrick Harker could easily have been any of 1, 2, or 3 cuts for 2025. We have him here as a rate-cut skeptic (in his last public appearance he suggested that the direction of the next move rates itself was a question).

• According to Rabobank, growth momentum has appeared to be sapping despite the better than expected 0.7% Q/q rise in GDP in Q1. April brought the double whammy of a range of price hikes in the UK and higher national insurance contributions by firms plus the disruption created by Trump’s tariff announcements.
• While UK business confidence subsequently found some support from the trade agreements reached with the US and India, in recent weeks data have hinted at a loosening labour market and softening in consumer spending. It is Rabo’s view that the BoE will cut rates in August and potentially again in November.
• By contrast the ECB has signalled that it has neared the end of its cycle, with headline inflation in the Eurozone back at 2%. The broad-based EUR’s gains this year indicates that a lot of good news has been priced in.
• While this suggests that the single currency may be subject to bouts of profit-taking, Rabo would favour buying EUR/GBP on dips towards their 0.87 target.

Heading into Thursday's employment report, implied probability of a 25bp cut in July is around 22% (having briefly pushed through to 25% after the surprise ADP payrolls contraction - see chart). Given what we've heard from FOMC officials since the June meeting, it would probably take a very weak report, including an unemployment rate above 4.3% in June, to force the FOMC off the sidelines on July 30.

• To be sure, July is still "live" though again probably contingent on clear evidence of labor market deterioration tomorrow. The current odds are better than the 10% probability seen immediately after the June FOMC meeting, in which Powell was seen to have largely taken July off the table ("it takes some time" for tariffs to be seen in prices he said then; "we feel like we're going to learn a great deal more over the summer on tariffs").
• Powell caused a minor stir on July 1 when he didn't refute the possibility of a rate cut at the July  meeting: "Yeah,I really can't say - it's going to depend on the data. And we are going meeting by meeting. I mentioned, you know, how I'm thinking about that, but I wouldn't take any meeting off the table or put it directly on the table, it's going to depend on how the data evolve."
• Forcefully pushing back on it would have been too abrasive an approach for Powell, given a growing if small group of likely dissenters to a hold in July. Though only two FOMC members have said that they would/could support a July rate cut, but both are permanent voters on the Board: Vice Chair Bowman ("I would support lowering the policy rate as soon as our next meeting ") Gov Waller (“I think we’re in the position that we could do this and as early as July").
• As we mused after Bowman's surprising dovish turn, we could easily see two dissents to a likely July rate hold, and she and Waller are likely the 3-2025 cut Dots in the June SEP.
• We haven't heard any other FOMC participants say they were seriously considering supporting a cut at the next meeting, with various members that see two cuts this year eyeing a later restart to easing (Daly / Kashkari specifically mentioned the fall/September respectively).