TARIFFS: Trump: US To Impose 50% Tariff Rate On Brazil, Sect 301 Investigation

Natixis becomes the latest sell-side institution to push back expectations of the next Fed cut, following Friday's Employment Report. They now see easing resuming in October, vs September previously. Overall they see consecutive cuts from that point to June 2026 to 2.75-3.00% (150bp of cuts).

• "The resilience in the labor market is the primary reason for pushing out the next cut. The most recent employment report showed a labor market that is continuing to cool a bit, but with few signs of imminent cracks. This will help to confirm that the risk of continuing to wait before resuming the cutting cycle is low and pausing to observe the impact and degree of passthrough from tariffs is the appropriate path."
• Overall it appears that there will be few if any analysts who expect a cut before September, going into the June FOMC meeting next week - we will update next Monday with our overview of analyst expectations.

• Jefferies expect core CPI at 0.34% M/M in May for 3.0% Y/Y.
• "Core goods are expected to come in hot, up 0.6% m/m with new and used cars, up 0.6% and 2.2%, serving as the main contributors. In addition, furnishing and apparel should be firm, each up 0.25%, along with auto parts up 0.5%.”
• What's more, “[t]here is upside risk going into the print given the possibility of tariffs coming through on a broader basis.”
• “The elevated core goods figure will be offset by weak energy goods (-2.6%) due to falling gas prices. For services, car maintenance is expected to come in at 0.6% while OER will remain firm at 0.36%.”
• They see headline CPI at 0.212% M/M for 2.5% Y/Y. 

• Muted reaction after the bell, stocks pared gains after wires reported a battalion of Marines (appr 500) to be deployed to Los Angeles to quell immigration protest unrest.
• Treasuries blipped higher after NY Fed 1Y inflation expectations come out lower than expected. Tsys remain inside session range, curves steeper with Bonds lagging.
• 1-Year median inflation expectations fell to 3.2% from 3.6% prior, the biggest drop since February 2023 to the lowest level since February of this year. 3Y median ticked 0.2pp lower to 3.00% (fully reversing what now appears to be a temporary tariff-led increase in April).
• Tsy Sep'25 10Y futures currently trades 6 at 110-03  vs. 110-07.5 session high, technical resistance above at 110-20.5 (50-day EMA).
• Curves steeper: 2s10s +0.903 at 47.391, 5s30s +1.498 at 86.007
• Cross asset: Stocks mildly higher, paring gains (SPX eminis +2.25 at 6009.0), Gold higher at 3327.5.
• Bbg US$ index little weaker, inside range at 1209.21 (-2.53).