Welcome back from the weekend, investors. Investors just took in a slate of “good news” economic data and the stock market is hovering at record highs as a result. Equities would rise even further if one Fed official gets his out-of-consensus preference next week.

Clear and present dissent

At least one policymaker at the Federal Reserve will dissent against Jerome Powell at the July meeting. 

In a bold and unusually direct speech to close out last week, Fed Governor Christopher Waller laid out the case for an immediate rate cut.

He made it clear that he’s prepared to vote for it before the end of the month, even if others aren’t. 

He built his argument with two core reasons: 

1. Inflation is near the Fed’s 2% target

2. The labor market is weaker than it looks  

In an explicit divergence from Powell, he asserted that talk of tariffs fueling inflation is mostly noise. 

“Tariff increases are a one-time boost to prices that do not sustainably increase inflation,” Waller said in prepared remarks in New York.

He pointed out that wage growth has cooled, productivity is improving, and inflation expectations remain anchored — which together point to no threat of rebounding prices. 

Meanwhile, as solid as the economic data has appeared, Waller maintained that beneath the headline numbers cracks are indeed beginning to form.

“With inflation near target and the upside risks to inflation limited, we should not wait until the labor market deteriorates before we cut the policy rate,” the Fed Governor said. 

In his view, the recent string of government job revisions suggests that private-sector job growth has stalled and job openings are evaporating faster than people assume. 

On top of that, new grads face the worst job market in years. 

The Fed’s current policy rate range is simply too restrictive, according to Waller. 

“If the slowing of economic and employment growth were to accelerate and warrant moving toward a more neutral setting more quickly, then waiting until September or even later in the year would risk us falling behind the curve of appropriate policy,” Waller said.

As Opening Bell Daily has reported, Waller’s boss Powell has a lengthy track record of delayed policy responses to economic data, dating back to the pandemic’s four-decade high inflation spike. 

However, because Waller’s latest speech aligns with President Trump’s calls for Powell to cut rates, Waller has taken some political heat for aligning with the White House. 

But to Neil Dutta, head of economics for Renaissance Macro, those attacks are unjustified.

For Waller to argue that the economy is not in fact as good as the White House claims doesn’t exactly come across as supportive of the administration.

Politics aside, Waller’s case is at least intellectually consistent. 

“If President Trump's goal is to leave his mark on the Fed, then he should proceed in a way that likely ensures that he is able to quickly fill the most seats,” Dutta said.

“Elevating Waller to the top job is the most obvious path to afford him that opportunity. Going the other route runs the risk of having a Chairman in Name Only no one respects.”

Market snapshot

Elsewhere

📊 Tesla and Alphabet report earnings in a busy week ahead. The giants will headline the 112 total S&P 500 companies reporting earnings this week as stocks hover at record highs. Other than corporate news, the economic data will be quiet ahead of the Fed’s July 29-30 meeting. (Yahoo Finance)

🏦 Scott Bessent made the case for Trump not to fire Jerome Powell. The Treasury Secretary cited practical obstacles and economic hazards to the president, who had been weighing his options on relieving the Fed Chair from his duties. Trump, however, disputed the report that Bessent talked him out of firing Powell. (CNBC)

📈 TSMC stock joined the trillion-dollar club. Taiwan Semiconductor Manufacturing surged over the last week on continued optimism for AI demand and innovation. It’s up roughly 50% from its April lows, and it now rivals Berkshire Hathaway in total market cap. (Bloomberg)

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Rapid-fire

• August 1 is a “hard deadline” for tariffs, Howard Lutnick said (CNBC)

• Bank earnings are sending the message that the economy is still on solid footing (Barron’s)

• China’s shipments of rare earth magnets in June skyrocketed after the trade truce with the US (Bloomberg)

• China kept its benchmark lending rate unchanged early Monday (CNBC)

• 110 of the 300 largest US housing markets have falling home prices (ResiClub)

• Tech bull Dan Ives’ shared his highest conviction stock for the next 12 months (Best Ideas Club)

• Stocks won’t stop breaking records even as Fed rate cut odds fall (Opening Bell Daily)

Last thing

About me

📰 I’m Phil Rosen, co-founder and editor-in-chief of Opening Bell Daily. I’ve published books, lived on three continents, and won awards for my journalism, which has appeared in Business Insider, Fortune, Yahoo Finance, Bloomberg and Inc. Magazine.

I write our flagship newsletter to prepare you for each trading day — unpacking markets, economic data and Wall Street with analysis you won’t find anywhere else.

Feedback? Reply to this email, ping me on X @philrosenn, or write me directly at [email protected].

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