This week George Goncalves, MUFG Head of U.S. Macro Strategy, gets us caught up on what has been happening in global macro and markets, with a focus on recapping the May NFP jobs report, which he believes wasn’t as strong as the headlines suggested, and that it is another report that demonstrates there are clearly macro divergences forming in various parts of the labor force.

George also provides his thoughts on what to look out for in the CPI report, where we are waiting to see if the shelter costs ever come down enough to pull inflation readings lower. Meanwhile, the CPI report takes place ahead of the June FOMC meeting where we are keenly focused on the dots (interest rate estimates) and the terminal level estimates for the core PCE inflation reading published in the summary of economic projections (SEP) by the Fed. In addition, will Chair Powell sound dovish (and echo some of the same concerns that the strategy team has around the true health of the jobs market) or will Chair Powell be hawkish. Chair Powell has threaded the needle lately with his communications, but if markets deem that his message is hawkish, after a hawkish release of the dots, a major risk-off would be in store.