While the global economic world remains transfixed on the situation in Greece, Citi Research analyst William Lee believes that the FOMC will continue to focus on improvement in the U.S. economy when it comes to determining U.S interest rate policy.

Following last week’s jobs report that indicated 223,000 jobs added and a 0.2 percent drop in unemployment rate to 5.3 percent, Citi continues to predict that the FOMC’s first rate hike is coming in September.

Strong Data

In addition to the strong data provided in last week’s report, Lee mentions 3.0 percent growth in real consumer spending in Q2 and a sharp rise in motor vehicle purchases as indicators of continuing economic recovery. Several key housing indicators have also been positive lately, and overall nonresidential construction spending has been strong, despite weakness in the oil industry.

Rising Term Premiums

Lee reminds…

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