Powell took a hawkish line when he spoke in Jackson Hole last week but avoided specifics to preserve his room for maneuver. The Fed chief said that the QE rollback could start this year, which the markets were quick to take into account as a credible event. The question is when the announcement will be made - in September or near the end of the year. The September Fed policy shift will likely require a strong positive surprise in the NFP report for August.
On July 2, the U.S. Department of Labor will release its June jobs report. It is expected that hiring will accelerate, and the unemployment rate will fall, which will help alleviate some of the recent labor shortages.