The floor is all the Fed’s today

As for the Fed, the decision will be announced at 2 PM ET with the press conference starting at 2:30 PM ET.

• Focus will be on forward guidance and the Fed’s data-dependent posture amid policy uncertainty.

The questions will likely center on the expectations for policy given the tariffs and its potential impact on growth/inflation.

Fed Chair Powell has remained committed to a “wait and see” approach, relying on incoming data before making any policy shifts. So far, that strategy has worked, as hard data continues to hold up. However, the full impact of new tariffs has yet to be felt.

As time passes without resolution, companies will be forced to make pricing decisions, and supply chains could face renewed strain. While employment trends may help absorb some inflationary pressure, broader effects may begin to surface. The U.S. economy is a complex mix of moving parts.

For now, the job market remains resilient—this week’s initial jobless claims data will be closely watched. While soft data continues to show weakness, the hard data still paints a stable picture.

The market is pricing in a 30% chance for a cut at the June meeting.

The U.S. Treasury auctioned off three notes on Monday and 10 year notes on Tuesday. Both were met with pretty decent demand. Today, they will refrain from auctioning off the 30-year bonds to stay away from the FOMC rate decision volatility. The 30 year bonds will be auctioned off tomorrow at 1 PM.

Consumer credit will also be released at 3 PM this afternoon with expectations of $9.50 billion increase versus the modest -0.81 billion decrease last month.

US stocks are modestly higher in premarket trading as the market reacts positively to the US/China trade talks. The features are employing a 19.34 point rise in the S&P. Yields are higher in the short end with the two-year up 2.5 basis points. The 30-year bond is down -1.9 basis points.