Economic reports due to be released in July could cause another rise in short term interest rates.
July starts out with a bang with America celebrating the birth of our country on July 4th. The fireworks will be continuing within the financial sector as it will be a busy month for data and events. First, we will have the release of the jobs report the Friday after the July 4th holiday. The markets will not only be focused on the job creation, but also the all-important wage inflation factor.
Speaking of inflation, less than one week later we will have the consumer inflation report released for June. No data moved the markets more sharply in June than the May inflation report. We then move on to the end of July in which we will see a flurry of activity. First, we will get the initial reading of economic growth for the second quarter. This will be followed by the conclusion of a meeting of the Federal Reserve’s Open Market Committee.
Unless there is a turnaround in the inflation numbers and a sharp slowdown in economic growth, the Fed is certain to raise short-term interest rates for the fourth time this year. Meanwhile, companies will be reporting their second quarter earnings which the stock market analysts will be watching closely as we move into August with another jobs report. Get ready for a busy, busy month. No summer vacation for market watchers.