Macro Roadmap: US CPI Meets the New Fed Chair / BOE's Bailey / Fed Speak
Overview — the day at a glance
The week's main event lands at 14:30 CET: US June CPI, the last inflation print before the 27-28 July FOMC, on a day the market has already moved to price a September Fed hike as close to certain.
Source: https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html
Consensus looks for headline inflation to fall to 3.8% year on year from 4.2%, with prices down 0.1% on the month as June's gasoline drop unwinds May's energy-driven jump, while core stays firm at 2.9% year on year, well above the 2% target. Ninety minutes later, at 16:00 CET, Fed Chair Kevin Warsh gives his first congressional testimony since taking the helm in May, having pledged to scale back forward guidance, making the afternoon a rare double-header of the data and the man who will judge it. The Asian session leads with China's June trade data at 05:00 CET, where consensus sees export growth easing to 18.2% year on year and the surplus widening to about 121 billion dollars, and the evening is filled with Fed speakers, ECB’s Lagarde, and BOE’s Bailey. Everything else, Swiss and German producer prices, Japanese industrial production, Indian wholesale inflation, Australian and New Zealand surveys, Chinese credit and an array of bond auctions, is second-tier against the CPI.
Data & Events
The US consumer price index for June is released at 14:30 CET. Consensus looks for headline inflation to decline 0.1% on the month, taking the annual rate down to 3.8% from 4.2% in May, as a sharp fall in gasoline reverses much of May's energy-driven increase. However, one bank notes that after June, the gasoline futures curve suggests that overall energy could revert to being a small positive for inflation again. Core inflation is seen as firmer: consensus is 0.25% on the month and 2.9% year on year, unchanged from May and still well above the Federal Reserve's 2% target. For goods inflation, the recent decline in tariff rates after IEEPA ended is likely offering some short-term relief, though business surveys still point to further price increases ahead, according to analysts.
The split between a softening headline and a sticky core is the report's central tension. The print is the last major inflation reading before the 27-28 July FOMC, and it lands the same afternoon as Fed Chair Warsh's congressional testimony. Markets have moved to price a September rate hike as close to certain, and now see an almost even chance of a July hike as well.
Editor's Note: Consensus already builds in the gasoline-driven headline drop, so the surprise that matters is in the core. A core monthly print at or above the 0.25% consensus, especially if hotel, travel and hospitality prices lift services as some expect around the World Cup, would harden the September-hike pricing. A softer core, closer to 0.17-0.19%, would leave room for a less aggressive Fed.
China's June trade balance is released at 05:00 CET. Consensus looks for exports to rise 18.2% year on year, down from 19.4% in May, and imports to slow to 24% from 27.4%, leaving the surplus wider at about USD 121 bn, up from USD 105 bn in May. The read on external demand comes with domestic demand still soft, so growth stays exposed to any softening abroad, and the June figures may still carry front-loading as US retailers pulled orders forward ahead of expected tariff increases. China's June credit aggregates, new yuan loans, M2 and total social financing, are also due during the day, with consensus for M2 at 8.5% year on year from 8.6%.
Editor's Note: A wide beat on exports would reinforce the view that AI-linked electronics and tariff front-loading are cushioning the economy, supporting risk-sensitive Asian currencies and industrial metals; a miss would sharpen concern about the post-front-loading cliff.
Switzerland's June producer and import prices at 08:30 CET are the domestic focus into the SNB's autumn assessment: the monthly reading follows a 0.4% fall and the annual rate a 1.8% decline, keeping Swiss pipeline inflation in outright deflation. The European morning also brings German wholesale prices (08:00 CET, consensus 0.2% on the month after -0.6%), Japanese final industrial production (06:30 CET, 0.5% on the month), Indian wholesale inflation (08:30 CET, seen easing to 9.15% from 9.68%), the UK's BRC retail sales monitor and Australian NAB business and Westpac consumer surveys.
Central Bank Speech Previews
Federal Reserve Chair Kevin Warsh delivers his semi-annual monetary policy testimony to Congress at 16:00 CET, his first appearance before lawmakers since being sworn in on 22 May, and it lands the same afternoon as the June CPI report. At the ECB's Sintra forum on 1 July, he bluntly reaffirmed the 2% commitment, saying prices are 'too high' and that anyone expecting the Fed to accept inflation above target 'would be disappointed'. He argued central banks should stop trying to predict the economy, said he had found 'common cause' with the ECB's Lagarde and the BoE's Bailey against forward guidance, and submitted no interest-rate projection at his first FOMC in June. He has defended the Fed's independence against pressure for lower rates.
Editor's Note: This is the day's most consequential appearance: an inflation-focused new Chair testifying within two hours of the CPI print. Analysts expect him to hold to his strict no-forward-guidance line and decline to offer a read on the data, though he could repeat his Sintra remark that inflation risks have diminished, which the market would take as dovish. The June FOMC meeting held rates but signalled a hawkish dot plot, with most participants seeing higher rates ahead. A reaffirmation of 'price stability first' would cement the hike pricing. Any nod that the gasoline-driven headline decline eases the urgency would give the priced relief rally room.
Bank of England Governor Andrew Bailey gives the set-piece Mansion House dinner speech on Tuesday evening, with the embargoed text published at 16:00 CET and the address delivered around 22:00 CET. At the end of June, he ruled out near-term easing, saying rate cuts had been 'off the table' since March and remained so, with UK inflation at 2.8% in the year to May and a possible rise towards 3.2% later in 2026 on energy base effects. He argued inflation would already be back at target were it not for the energy shock from the war in the Middle East, and flagged financial stability risks from elevated leverage in government bond and equity markets. At the June meeting, the MPC voted 7-2 to hold the Bank Rate at 3.75%, with Bailey in the majority and two members dissenting to a hike.
Editor's Note: Mansion House is a policy set-piece, and this one comes a fortnight before the 30 July decision with two MPC members already voting to hike. Worth watching if Bailey leans towards or against that dissent.
The 15:00 CET entry for ECB President Christine Lagarde is a private meeting with US Treasury Secretary Scott Bessent in Washington, not a public speech, and no prepared remarks are scheduled. She is in Washington this week, having also met Fed Chair Warsh on Monday. Her most recent set-piece was at the ECB's Sintra forum on 29 June, 'Back to basics in an uncertain environment', where she said monetary policy had returned to using the interest rate as its primary tool and that forward guidance was 'not in the cards', replaced by 'framework guidance' on how the Council decides rather than what it will do. She set out a three-part reaction function, the inflation outlook, underlying dynamics and the strength of transmission, and stressed euro-area resilience through recent shocks.
Federal Reserve Governor Michael Barr speaks at 18:40 CET, in the US evening after the CPI. Barr stepped down as Vice Chair for Supervision in February 2025 and continues as a Governor, and his recent focus has been on bank regulation rather than the rate path. In a 6 June speech, he warned that regulatory proposals would cut required capital at the eight largest banks by about 6%, roughly 60 billion dollars less loss-absorbing capital, invoked the 160-billion-dollar cost of the savings-and-loan crisis, and flagged rising nonbank interconnectedness, with bank credit commitments to other financial firms above 2.6 trillion dollars in late 2025.
Chicago Fed President Austan Goolsbee speaks at 19:00 CET; he is a non-voter on the FOMC in 2026, with Chicago rotating off the committee. Long one of the committee's more dovish voices, he has recently pivoted to emphasising inflation as the binding problem, saying in late June that core inflation is 'still well too high and trending the wrong way' and that the inflation side of the mandate 'is clearly the problem'. He endorsed the new Chair's move away from forward guidance, welcoming 'less speculation about rates', and declined to say where policy is headed.
Editor's Note: As a non-voter, Goolsbee does not shape the July vote, but his shift from dove to inflation-focused caution is a useful gauge of how far the committee's centre has moved. A read on whether June's data offered, in his words, a 'glimmer of hope' would colour how the market carries the CPI into the FOMC.
Federal Reserve Governor Lisa Cook speaks at 19:30 CET. A data-dependent centrist, she said in late May that risks are 'tilted toward higher inflation', with the PCE price index up 3.8% over the year to April and core at 3.3%, partly on tariffs and energy. She described a stable labour market with unemployment around 4.3%, near estimates of its natural rate, and highlighted more than 1.5 trillion dollars in announced AI data-centre investment and its pricing implications for semiconductors, construction wages, and utilities.
Editor's Note: Cook is
Overview — the day at a glance
The week's main event lands at 14:30 CET: US June CPI, the last inflation print before the 27-28 July FOMC, on a day the market has already moved to price a September Fed hike as close to certain.
Source: https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html
Consensus looks for headline inflation to fall to 3.8% year on year from 4.2%, with prices down 0.1% on the month as June's gasoline drop unwinds May's energy-driven jump, while core stays firm at 2.9% year on year, well above the 2% target. Ninety minutes later, at 16:00 CET, Fed Chair Kevin Warsh gives his first congressional testimony since taking the helm in May, having pledged to scale back forward guidance, making the afternoon a rare double-header of the data and the man who will judge it. The Asian session leads with China's June trade data at 05:00 CET, where consensus sees export growth easing to 18.2% year on year and the surplus widening to about 121 billion dollars, and the evening is filled with Fed speakers, ECB’s Lagarde, and BOE’s Bailey. Everything else, Swiss and German producer prices, Japanese industrial production, Indian wholesale inflation, Australian and New Zealand surveys, Chinese credit and an array of bond auctions, is second-tier against the CPI.
Data & Events
The US consumer price index for June is released at 14:30 CET. Consensus looks for headline inflation to decline 0.1% on the month, taking the annual rate down to 3.8% from 4.2% in May, as a sharp fall in gasoline reverses much of May's energy-driven increase. However, one bank notes that after June, the gasoline futures curve suggests that overall energy could revert to being a small positive for inflation again. Core inflation is seen as firmer: consensus is 0.25% on the month and 2.9% year on year, unchanged from May and still well above the Federal Reserve's 2% target. For goods inflation, the recent decline in tariff rates after IEEPA ended is likely offering some short-term relief, though business surveys still point to further price increases ahead, according to analysts.
The split between a softening headline and a sticky core is the report's central tension. The print is the last major inflation reading before the 27-28 July FOMC, and it lands the same afternoon as Fed Chair Warsh's congressional testimony. Markets have moved to price a September rate hike as close to certain, and now see an almost even chance of a July hike as well.
Editor's Note: Consensus already builds in the gasoline-driven headline drop, so the surprise that matters is in the core. A core monthly print at or above the 0.25% consensus, especially if hotel, travel and hospitality prices lift services as some expect around the World Cup, would harden the September-hike pricing. A softer core, closer to 0.17-0.19%, would leave room for a less aggressive Fed.
China's June trade balance is released at 05:00 CET. Consensus looks for exports to rise 18.2% year on year, down from 19.4% in May, and imports to slow to 24% from 27.4%, leaving the surplus wider at about USD 121 bn, up from USD 105 bn in May. The read on external demand comes with domestic demand still soft, so growth stays exposed to any softening abroad, and the June figures may still carry front-loading as US retailers pulled orders forward ahead of expected tariff increases. China's June credit aggregates, new yuan loans, M2 and total social financing, are also due during the day, with consensus for M2 at 8.5% year on year from 8.6%.
Editor's Note: A wide beat on exports would reinforce the view that AI-linked electronics and tariff front-loading are cushioning the economy, supporting risk-sensitive Asian currencies and industrial metals; a miss would sharpen concern about the post-front-loading cliff.
Switzerland's June producer and import prices at 08:30 CET are the domestic focus into the SNB's autumn assessment: the monthly reading follows a 0.4% fall and the annual rate a 1.8% decline, keeping Swiss pipeline inflation in outright deflation. The European morning also brings German wholesale prices (08:00 CET, consensus 0.2% on the month after -0.6%), Japanese final industrial production (06:30 CET, 0.5% on the month), Indian wholesale inflation (08:30 CET, seen easing to 9.15% from 9.68%), the UK's BRC retail sales monitor and Australian NAB business and Westpac consumer surveys.
Central Bank Speech Previews
Federal Reserve Chair Kevin Warsh delivers his semi-annual monetary policy testimony to Congress at 16:00 CET, his first appearance before lawmakers since being sworn in on 22 May, and it lands the same afternoon as the June CPI report. At the ECB's Sintra forum on 1 July, he bluntly reaffirmed the 2% commitment, saying prices are 'too high' and that anyone expecting the Fed to accept inflation above target 'would be disappointed'. He argued central banks should stop trying to predict the economy, said he had found 'common cause' with the ECB's Lagarde and the BoE's Bailey against forward guidance, and submitted no interest-rate projection at his first FOMC in June. He has defended the Fed's independence against pressure for lower rates.
Editor's Note: This is the day's most consequential appearance: an inflation-focused new Chair testifying within two hours of the CPI print. Analysts expect him to hold to his strict no-forward-guidance line and decline to offer a read on the data, though he could repeat his Sintra remark that inflation risks have diminished, which the market would take as dovish. The June FOMC meeting held rates but signalled a hawkish dot plot, with most participants seeing higher rates ahead. A reaffirmation of 'price stability first' would cement the hike pricing. Any nod that the gasoline-driven headline decline eases the urgency would give the priced relief rally room.
Bank of England Governor Andrew Bailey gives the set-piece Mansion House dinner speech on Tuesday evening, with the embargoed text published at 16:00 CET and the address delivered around 22:00 CET. At the end of June, he ruled out near-term easing, saying rate cuts had been 'off the table' since March and remained so, with UK inflation at 2.8% in the year to May and a possible rise towards 3.2% later in 2026 on energy base effects. He argued inflation would already be back at target were it not for the energy shock from the war in the Middle East, and flagged financial stability risks from elevated leverage in government bond and equity markets. At the June meeting, the MPC voted 7-2 to hold the Bank Rate at 3.75%, with Bailey in the majority and two members dissenting to a hike.
Editor's Note: Mansion House is a policy set-piece, and this one comes a fortnight before the 30 July decision with two MPC members already voting to hike. Worth watching if Bailey leans towards or against that dissent.
The 15:00 CET entry for ECB President Christine Lagarde is a private meeting with US Treasury Secretary Scott Bessent in Washington, not a public speech, and no prepared remarks are scheduled. She is in Washington this week, having also met Fed Chair Warsh on Monday. Her most recent set-piece was at the ECB's Sintra forum on 29 June, 'Back to basics in an uncertain environment', where she said monetary policy had returned to using the interest rate as its primary tool and that forward guidance was 'not in the cards', replaced by 'framework guidance' on how the Council decides rather than what it will do. She set out a three-part reaction function, the inflation outlook, underlying dynamics and the strength of transmission, and stressed euro-area resilience through recent shocks.
Federal Reserve Governor Michael Barr speaks at 18:40 CET, in the US evening after the CPI. Barr stepped down as Vice Chair for Supervision in February 2025 and continues as a Governor, and his recent focus has been on bank regulation rather than the rate path. In a 6 June speech, he warned that regulatory proposals would cut required capital at the eight largest banks by about 6%, roughly 60 billion dollars less loss-absorbing capital, invoked the 160-billion-dollar cost of the savings-and-loan crisis, and flagged rising nonbank interconnectedness, with bank credit commitments to other financial firms above 2.6 trillion dollars in late 2025.
Chicago Fed President Austan Goolsbee speaks at 19:00 CET; he is a non-voter on the FOMC in 2026, with Chicago rotating off the committee. Long one of the committee's more dovish voices, he has recently pivoted to emphasising inflation as the binding problem, saying in late June that core inflation is 'still well too high and trending the wrong way' and that the inflation side of the mandate 'is clearly the problem'. He endorsed the new Chair's move away from forward guidance, welcoming 'less speculation about rates', and declined to say where policy is headed.
Editor's Note: As a non-voter, Goolsbee does not shape the July vote, but his shift from dove to inflation-focused caution is a useful gauge of how far the committee's centre has moved. A read on whether June's data offered, in his words, a 'glimmer of hope' would colour how the market carries the CPI into the FOMC.
Federal Reserve Governor Lisa Cook speaks at 19:30 CET. A data-dependent centrist, she said in late May that risks are 'tilted toward higher inflation', with the PCE price index up 3.8% over the year to April and core at 3.3%, partly on tariffs and energy. She described a stable labour market with unemployment around 4.3%, near estimates of its natural rate, and highlighted more than 1.5 trillion dollars in announced AI data-centre investment and its pricing implications for semiconductors, construction wages, and utilities.
Editor's Note: Cook is a permanent voter, so her reaction carries weight for the July decision. Her 'tilted toward higher inflation' framing already leans against cuts; a firm core CPI would reinforce it, and any explicit willingness to hike if disinflation stalls would land squarely in the market's September pricing.
Federal Reserve Governor and Vice Chair for Supervision Michelle Bowman speaks at 20:55 CET, closing the day's run of Fed voices. Her most recent remarks, on 7 July, initiated a Financial Stability Board workstream on responsible AI adoption and argued that bank governance should scale to a use case's materiality, with proportionality for smaller institutions. On monetary policy, drawn from June-FOMC reporting rather than a fresh speech, she has favoured keeping the statement's cut-leaning guidance despite the hawkish hold, reading the inflation pickup as temporary.
Editor's Note: Bowman is a permanent voter and, unusually on this slate, the one with a documented dovish lean, having read the inflation pickup as temporary. If she holds that view after a firm core CPI, she would stand out against the day's more hawkish chorus, a small dovish marker ahead of the July meeting; if she hardens, it would signal that the committee's doves are thinning.
a permanent voter, so her reaction carries weight for the July decision. Her 'tilted toward higher inflation' framing already leans against cuts; a firm core CPI would reinforce it, and any explicit willingness to hike if disinflation stalls would land squarely in the market's September pricing.
Federal Reserve Governor and Vice Chair for Supervision Michelle Bowman speaks at 20:55 CET, closing the day's run of Fed voices. Her most recent remarks, on 7 July, initiated a Financial Stability Board workstream on responsible AI adoption and argued that bank governance should scale to a use case's materiality, with proportionality for smaller institutions. On monetary policy, drawn from June-FOMC reporting rather than a fresh speech, she has favoured keeping the statement's cut-leaning guidance despite the hawkish hold, reading the inflation pickup as temporary.
Editor's Note: Bowman is a permanent voter and, unusually on this slate, the one with a documented dovish lean, having read the inflation pickup as temporary. If she holds that view after a firm core CPI, she would stand out against the day's more hawkish chorus, a small dovish marker ahead of the July meeting; if she hardens, it would signal that the committee's doves are thinning.