What I'm Watching In July: Rate Hikes, Testimony, And AI Volatility

Markets face heightened volatility, with equities (e.g., SPY) not fully pricing in the risk of a potential July Fed rate hike. The key catalysts are June CPI, Fed Chair Warsh’s testimony, and the July FOMC—specifically whether inflation persistence keeps policy tighter for longer. Net, this setup increases rate-volatility risk and could pressure risk assets if inflation data or Fed messaging come in hotter than expected.

Analysis

Markets face heightened volatility, with equities (e.g., SPY) not fully pricing in the risk of a potential July Fed rate hike. The key catalysts are June CPI, Fed Chair Warsh’s testimony, and the July FOMC—specifically whether inflation persistence keeps policy tighter for longer. Net, this setup increases rate-volatility risk and could pressure risk assets if inflation data or Fed messaging come in hotter than expected.