Anyone who bothers to show up for work this week will hear from Jerome Powell.

On Tuesday and then again on Wednesday, America’s top central banker will make his semi-annual pilgrimage to Capitol Hill, where he’ll be interrogated by irritable partisan hacks.

This’ll be the same mind-numbing song and dance it always is. Democrats and Republicans alike will pretend to be mad at Powell, albeit for different reasons.

Republicans, forgetting Powell’s one of their own, will cast conspiratorial aspersions, berate Powell for countenancing elevated inflation and ask leading questions about fiscal policy in a bid to trick him into blaming The White House for the deficit. They won’t mention that if fiscal profligacy were a crime, Republicans would be repeat offenders too.

Democrats will accuse Powell of throwing people out of work in the service of securing another half point reduction in a mis-measured inflation aggregate. They’ll pretend the 0.7ppt rise in the unemployment rate from an unsustainable 3.4% to 4.1% counts as a crime against humanity. They’ll blame Powell for the nation’s homelessness crisis, and also for the sins of Wall Street. Powell, they’ll say, is a “dangerous man.”

For his part, Powell will sip water stoically, comforted by the calm, looped monotone playing in his head: “It doesn’t matter Jay, you’re rich. It doesn’t matter Jay, you’re rich. It doesn’t matter Jay…”

Out loud, he’ll say the Fed’s committed to restoring price stability. And that success in that regard’s assured because failure’s not an option. He’ll say the Committee needs a little more evidence before cutting rates. He’ll concede that fiscal policy’s not sustainable before quickly noting that the Fed can’t do anything about that. And no, the Fed doesn’t want to comment on the election other than to gently note that central bank independence is very, very important.

The media will cover the first day (Tuesday) extensively and the second day (Wednesday) barely or not at all. The chances of Powell saying anything to materially change traders’ outlook on policy for the balance of the year are de minimis, although he may suggest the Committee’s “close” to having the confidence it needs to “reduce the amount of policy restriction.”

After a run of softer data culminating in the June jobs report (which, despite beating on the headline, came with large downward revisions to the prior two months and another uptick in the jobless rate), the odds of a first Fed cut at the September FOMC meeting are appreciable.

As the figure shows, traders have fully priced two cuts by year end.

The June dot plot, you’ll recall, was stale as soon as it was released. Just hours earlier, the Fed welcomed a favorable inflation release, but Powell indicated policymakers didn’t change their SEP forecasts, which is to say the dots and projections didn’t take account of the best CPI report of the pandemic era.

Speaking of CPI, the BLS on Thursday will tell everyone what they imagine inflation was in the US last month. Consensus is looking for another benign release, where that means a 0.2% MoM read on the core gauge.

A consensus print would mark the third consecutive acceptable read on price growth. An undershoot (i.e., a sub-0.2% MoM reading) would make September look like a lock for a cut although there’s a lot of data between now and then.

“We’ll be watching the supercore measure yet again, particularly in the wake of May’s 0.0% print,” BMO’s Ian Lyngen and Vail Hartman remarked. “Given that both OER and Rent have gained +0.4% for four consecutive months, any progress lower will be relevant as we eye the pre-pandemic range of 0.2%-0.3% as a key objective for the Fed in reestablishing price stability,” they went on, noting that there’s “a strong correlation between unemployment and rents — a dynamic that will become increasingly relevant as the summer unfolds.”

Also on the docket in the US this week: The NY Fed’s consumer survey, PPI and the first read on University of Michigan sentiment for July. Earnings season starts Friday with JPMorgan, Wells and Citi.

Overseas, investors will weigh the results of the French election (i.e., the composition of the legislature following the runoff) as well as inflation data out of China (remember: you want faster price growth there).