Tomorrow's retail sales number will be an important barometer on the assumed Q2 growth pickup.
Stocks might benefit from 2016 election when several policy issues may break the political log jam: immigration, trade, infrastructure and tax reform. (This might be wishful thinking)
Inflation may surprise to the upside. This is an out-of-consensus view. Monetary policy works with significant lags, and the extraordinarily easy monetary policy of the past 5 years will eventually bump up inflation. Right now the consensus view is inflation will remain subdued from quite some time. Much of the recent global bond selloff was a result of higher inflation numbers and slightly increased inflation expectations.
I believe the neutral Fed Funds rate is currently around 2 - 2.5%, far below the "old" neutral rate of 5% and even far below the Fed's own current view of a 3.5% neutral rate. The Fed is likely to hike at the September meeting because inflation has bottomed, and the longer the Fed waits to lift-off, the more likely the Fed might be forced to tighten more quickly and throw the economy into recession.
The USD should benefit from the Fed's tighter monetary policy, particularly because the ECB and BOJ are still in easing mode. This is the consensus view, and today is a good example of why consensus trades sometimes don't work. The pace of the USD rally should decrease to around 5% per annum from double digits the past 2 years. Currency movements tend to occur in decade long cycles, so I would expect the USD to restrengthen as long as the U.S. economy stays strong.