CONSUMERS’ SHORT-TERM INFLATION OUTLOOK JUMPS — Reuters: “U.S. consumers expect the economy to continue its rapid resurgence from the COVID-19 pandemic over the next year, with forecasts for inflation, earnings, income growth and spending all increasing in June, according to a monthly survey released on Monday by the New York Federal Reserve. "One-year-ahead median inflation expectations jumped for the eighth consecutive month to 4.8% in June, up from 4.0% in May and marking a new series high since the survey was launched in 2013. At the three-year outlook, they were unchanged at 3.6%.” And the inflation threat could be boosted by changes in globalization, demographics and even e-commerce — WSJ’s Grynn Guilford: “For the past few decades, the Federal Reserve has succeeded in keeping inflation low—perhaps too low. It had an assist: Shifts in the global economy, including globalization, demographics and the rise of e-commerce, helped keep prices in check. “Some economists say these so-called secular forces have begun to reverse in ways that the pandemic has intensified. ‘The factors that were…playing a significant role in that low-inflation environment last cycle are beginning to fade,’ said Sarah House, director and senior economist at Wells Fargo.” BIDEN’S PENSION RESCUE SEEN AS BIGGER HELP FOR CORPORATE BONDS — Bloomberg’s David Caleb Mutua: “U.S. President Joe Biden’s planned pension rescue could result in even more money being shunted into investment-grade corporate bonds than previously thought, according to Citigroup Inc. strategists. “The Pension Benefit Guaranty Corp., which insures pensions, issued rules on Friday for bailout money for multi-employer plans that are severely underfunded. These plans can apply for rescue funds as part of the $1.9 trillion pandemic-relief bill signed into law in March.” BANK PROFITS POISED TO SURGE — NYT’s Lananh Nguyen: “The nation’s biggest banks are about to report windfall profits as customers increase their spending and the economy bounces back from the pandemic. Profits for behemoths including JPMorgan Chase and Goldman Sachs are expected to jump when they report second-quarter results this week. Their Wall Street divisions have been able to cash in on a red-hot market for deals, while the banks’ Main Street units benefited as customers went back to work and opened their wallets.” YELLEN LOOKS TO REVIVE U.S.-EU TIES WHILE FACING DOWN CHINA, RUSSIA — Bloomberg’s Christopher Condon: “Treasury Secretary Janet Yellen made a new push in Brussels to repair U.S. ties with the European Union, urging members of the bloc to help confront China and Russia. In her first visit as Treasury chief to the European capital, Yellen hearkened back to the partnership and ‘rules-based international order’ constructed after World War II -- before calling out three countries she said imperiled that order.” FED’S BARKIN: LABOR MARKET HASN’T HEALED ENOUGH TO TAPER BOND BUYING — WSJ’s Michael S Derby: “Federal Reserve Bank of Richmond President Thomas Barkin isn’t ready to call for an end to the U.S. central bank’s $120 billion a month in bond-buying stimulus given where the labor market stands today. "When it comes to slowing the pace of asset buying, ‘if the labor market can clear relatively quickly, then maybe it can happen sooner, but if it takes longer for the labor market to reopen, it goes a little later,’ Mr. Barkin said in a Wall Street Journal interview Friday.” Williams echoed that, saying he doesn’t yet see a case to slow the Fed’s bond buying either — WSJ’s Michael S. Derby: “Federal Reserve Bank of New York President John Williams said Monday that conditions haven’t yet been met to pare back the pace of the central bank’s $120 billion a month bond-buying stimulus program. “‘We set a very clear marker, I think, not a quantitative marker, but a very clear marker that we want substantial further progress [on job market improvement] relative to where we were’ during the period before the coronavirus pandemic took hold, Mr. Williams told reporters after a speech. ‘That’s where I’m focused, clearly right now we have not achieved that,’ he said.” And Williams added that the Fed’s Treasury purchases also boost the housing market — Bloomberg’s Matthew Boesler: “The U.S. central bank’s purchases of Treasury and mortgage-backed securities are both contributing to lower housing costs, Federal Reserve Bank of New York President John Williams said, alluding to an ongoing debate among policy makers over whether or not to scale back MBS buying faster than Treasuries when the time comes to taper.” | 
