Wednesday’s FOMC meeting will be the main focus of this week’s holiday-shortened US calendar. We expect the Fed to hold rates steady and mostly maintain existing signals about policy. The statement, Summary of Economic Projections (SEP) and Chair Powell's press conference will all likely indicate that the Fed can remain patient with adjusting policy. Updated projections for 2025 are likely to show weaker growth, higher inflation, and could show a softer labor market. With these adjustments, our baseline is that the median dot still shows two rate cuts in REMCY25. In US macro data, we expect retails sales to fall by .9% MoM in May driven by a sharp decline in auto sales. Nominal control retail sales likely grew 0.14% m-o-m following a decline in April. In UST auctions this week, we have 13 BN USD supply of 20 BN USTs on Monday & 23 BN USD of 5year TIPS. In rest of the world events, we have BOE, SNB & BOJ policy meets this week. We expect the Swiss National Bank (SNB) to announce a 50bp policy rate cut to -.25% on 19 June to counter the recent CHF’s strength. We expect BOE to remain on status quo in it's 19th June meeting with a dovish hold considering recent data has been weak both in GDP & labor data. BOJ meeting on 17th June might be status quo too with no change in QT plans. We expect a hike of 25 bps in it's 31st July meeting provided there are no local election surprises & a likely trade deal with US by June end.
