Independence Day

Daily update

The Wall Street Journal reports US President Trump may announce the next Federal Reserve Chair in September or October. The Senate needs to confirm the Chair, and in Trump’s first term was prepared to oppose several of Trump’s Fed nominees. Only convention prevents the Fed from overruling the Chair—an obvious political appointee may be ignored by the FOMC. The greatest threat to policy independence would be someone who was not an obvious political puppet but was swayed by Trump’s instructions.
US first quarter GDP is due for revision (no changes are expected). This records economic activity before much of the impact of trade taxes, government disruption, and immigration roundups. It is a reminder of US economic strength at the start of this year, which is important as it provides a firm foundation for activity in the face of subsequent damage to growth.
US May trade and inventory data will give some hints as to the effects of trade taxes, and maybe a suggestion as to how long it will be before those taxes show up in consumer prices.
Europe has little to offer other than a pontification of central bankers. There is consumer sentiment from Germany and retailers’ sentiment from the UK, but markets should not pay much attention.