In Congressional testimony, Fed Chair Powell signaled an almost certain rate cut at the end of July. Powell noted that “.... the case for a somewhat more accommodative monetary policy had strengthened. …based on incoming data and other developments… uncertainties around trade tensions and concerns about the strength of the global economy continue to weigh on the U.S. economic outlook.” Despite the darkening outlook, the economy did add +224k jobs in June, beating expectations of +165k. The unemployment rate backed up +0.1% to 3.7%, largely as a result of a +335k increase in the labor force. There were some negatives in the report as the prior two months were revised down -11k jobs, and wages disappointed slightly at +3.1% y/y vs. expectations of +3.2%. Despite the strength of the report, the 6 and 12 months trends are downward, supporting the Fed’s deteriorating outlook. We expect a cut in July and October and two more cuts in 2020.