Major indices are moving higher following news the U.S. brokered a ceasefire between Israel and Iran.

Meanwhile, oil and natural gas are selling off and reaching pre-conflict levels.

Notably, the ten-year treasury yield (TNX) is also continuing lower and testing its 200-day moving average.

Energy (XLE) and Consumer Staples (XLP) are the only sectors in red territory. “Risk on” sectors saw the most pronounced rises, with Technology (XLK) in the lead and getting a boost from semiconductors.

Fed Fight

Not only has the media come to Powell’s rescue over criticism from President Trump, but they are loudly suggesting fellow members of the FOMC, voicing dissenting opinions, shouldn’t be taken at face value.

Yesterday evening the Chicago Fed President Austan Goolsbee, a Biden appointee, joined Bowman and Waller, suggesting rate cuts could be in the cards.

Trump vs. Powell

Presidents have bumped heads with Fed chairs since the very first appointment.

Ironically, Fed Chair Powell is in a hot seat on Capitol Hill today and tomorrow.

These hearings used to be called Humphrey Hawkins, after the authors of the bill. It allowed Congress to punt on their job of full employment and assign it to the Federal Reserve.

Powell bobbed and weaved on why the Fed remains far more restrictive than rates of our main economic trading partners.

Something tells me President Trump will continue to demand that Powell “do the job.”

Powell even signaled today that higher tariffs could begin raising inflation this summer, a period that will be key for the Fed to consider the possibility of cutting rates.

"We should start to see this over the summer, in the June number and the July number...If we don't we are perfectly open to the idea that the pass-through (to consumers) will be less than we think, and if we do that will matter for policy." – Jerome Powell

Economic Data

The Conference Board Consumer Confidence Index fell 5.4 points in June to 93 and came in below estimates of 100. The Present Situation Index fell by 6.4 points to 129.1, a faster decline than the Expectations Index which fell 4.6 points to 69. Notably, labor market expectations and it's present situation cooled according to respondents.

The Richmond Manufacturing Index rose 2 points to -7 in June, below consensus of -10. The results showed softer declines in factory orders and shipments.

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