Last Rate Hike? No Rate Hike?

MEGA8s getting sold

With July sporting the lowest total global rate hikes in this cycle thus far, will the FOMC still hike? The markets confidence level measured by the CME WatchTool sports a 99.2% chance of a 25bp hike…Magnelibra would opt for a No hike, no follow up meeting and leave the market to decide what to make of the move. Although Oil has moved above our $76 level, housing prices are still elevated and we haven’t seen a negative NFPayroll print (whose counting the 5m plus enrolled in Disability since 2020).

So what Magnelibra believes is not the reality of where the FOMC finds itself and yes it must maintain vigilance and prove to the world its serious about inflation so yea 25bp is probably correct, but its more show than substance really. We feel the global economies are about to deal with some major funding head winds, we aren’t sure how the Ukr/Rus conflict will transpire and yes food, energy, housing are still elevated. With that in mind, we know the big event is Wednesday’s FOMC but the rest of the week gives us some decent inflation data:

Source MarketWatch

As far as Friday’s settlement for the markets we cover, we included Thursdays in the snapshot as well as we had to adjust the RBOB and SOFR settles, Nasdaq back to back weakness, a rare sight: