As you were

Daily update

Iran and Israel seem to be saying “if they stop, I’ll stop”, although there were some missile exchanges overnight. That is enough for markets, with oil prices back to the levels of a couple of weeks ago (wiping out the potential economic impact). As with situations like North Korea, investors are not inclined to give weight to extreme tail risks, so things like the location of enriched uranium will be overlooked.
There were some moderately dovish comments from members of the Federal Reserve which should support financial markets. The suggestion was that rates could be cut over the summer, and could come down while inflation rose. The US economic sequence is higher inflation, lower real incomes, slower spending, slower hiring, and slower growth. If data dependency is replaced with forward-looking policy, the slower growth conclusion could allow rate cuts with rising inflation.
Federal Reserve Chair Powell testifies to Congress. The testimony has value. The question-and-answer session often fails to add anything other than social media soundbites. Sixteen other central bankers are speaking today (ECB Chief Economist Lane speaks twice, but chief economists are always worth listening to more than once).
The German ifo and US consumer confidence data are due for release, but they are only survey evidence.