Up ahead today is private-sector employment data from ADP, a day before the widely watched nonfarm payrolls report

Fed Chair Jerome Powell says steady economic activity was giving the central bank time to study the effects of tariff increases on prices and growth before resuming interest-rate reductions.

In the eurozone, the unemployment rate rose in May to 6.3% in the 20-nation currency area, up from 6.2% in April.

Federal Reserve Chair Jerome Powell kept his options open when he said steady economic activity was giving the central bank time to study the effects that tariff increases have on prices and growth before resuming interest-rate reductions.

“We’re simply taking some time,” Powell said Tuesday at a conference in Portugal, repeating his earlier view. “As long as the U.S. economy is in solid shape, we think the prudent thing to do is wait and learn more and see what those effects might be.”

The eurozone’s unemployment rate inched higher in May, a sign of jitters among European firms amid economic uncertainty over tariffs and geopolitical tensions.

Unemployment rose to 6.3% in the 20-nation currency area, up from 6.2% in April, the European Union’s statistics agency Eurostat said Wednesday. A consensus of economists polled by The Wall Street Journal had expected the rate to hold at 6.2% in May.

Despite the uptick, the jobless rate is near historically tight levels. April’s level equaled the eurozone’s record-low rate, although it came after March’s level had been revised higher to 6.4%.

The Bank of England might change the target for reducing its portfolio of government bonds over the coming year, a member of the Monetary Policy Committee said Wednesday.

In a speech in Portugal, Alan Taylor said the U.K. economy might not now experience a “soft landing” from the surge in inflation that followed Russia’s full-scale invasion of Ukraine, and called for further cuts in the key interest rate.

The public clash over the Trump administration’s sweeping deportations has centered on the economic and social fallout in big, Democratic-run cities such as Los Angeles and Chicago, where President Trump has promised to focus his enforcement efforts. Yet deportations are also hitting less prominent places: smaller cities and neighborhoods across the Rust Belt, where economists say recent immigration has helped boost faltering economies and offset long-running population declines.

In Cincinnati, arrests cast a shadow over the local economy. Restaurant tables emptied. Kitchen workers stayed home. Fruit vendors disappeared from the streets. The number of shoppers at stores shrank, and those who still went didn’t linger for long.

After failing to cut a trade deal with Japan following weeks of talks, Commerce Secretary Howard Lutnick and U.S. Trade Representative Jamieson Greer decided to turn up the pressure.

When Japanese officials arrived in Washington in late May, Lutnick and Greer warned them that if the two sides couldn’t work out an agreement soon, the conversations might start shifting from easing the tariffs President Trump had recently imposed toward additional punitive measures, according to people familiar with the matter. The Americans said they might demand a cap on the number of vehicles Japan could export to the U.S.—a policy known as a voluntary export restriction.

But the Japanese officials stood their ground. From the start, they had told the Americans they wouldn’t agree to any deal that preserves Trump’s 25% automotive tariff, according to people familiar with the conversations. That impasse continues.

8:15 a.m.: ADP National Employment Report
10 a.m.: Metropolitan Area Employment and Unemployment

8:30 a.m.: U.S. International Trade in Goods & Services
8:30 a.m.: Unemployment Insurance Weekly Claims Report - Initial Claims
8:30 a.m.: U.S. Employment Report
9:30 a.m.: IMF regular press briefing with Strategic Communications Director Julie Kozack
9:45 a.m.: U.S. Services PMI
10 a.m.: Manufacturers' Shipments, Inventories & Orders (M3)
10 a.m.: ISM Report On Business Services PMI
11 a.m.: Global Services PMI
1 p.m.: U.S. financial markets close early ahead of Independence Day
2 p.m.: U.S. Securities and Exchange Commission Closed Meeting
4:30 p.m.: Foreign Central Bank Holdings
4:30 p.m.: Federal Discount Window Borrowings

This week's strong JOLTS job openings data suggest the U.S. labor market remains resilient, with no urgency to cut rates, Brown Brothers Harriman's Elias Haddad says in a note. Federal Reserve Chair Jerome Powell also stressed prudency about waiting with interest-rate cuts as long as the U.S. economy is in solid shape, the market strategist says. Political interference remains a risk, however, with President Trump calling for lower rates and criticizing Powell. "[Powell's] wait-and-see message is drowned out by political pressure to lower the funds rate," Haddad says. — Emese Bartha

The optimism of U.S. farmers surrounding the farm economy had a negative turn in the past month, according to a survey from Purdue University and the CME Group. The group says June sentiment fell 12 points from the previous month, to a reading of 146. Most of the darkening sentiment has to do with growing pessimism surrounding U.S. agricultural export sales. "From May to June, the percentage of producers who said they expect increasing agricultural exports over the next five years dropped to 41% from 52%," the researchers said in a note. Crop producers have most notably grown more skeptical about exports, while livestock producers remain optimistic about their overall economic prospects. — Kirk Maltais

• Republicans squeaked President Trump’s tax-and-spending megabill through the Senate on Tuesday, capping a long night of dealmaking to win over holdouts and ending with a tiebreaking vote from Vice President JD Vance.
• The Bank of Japan’s key interest rate is below the level at which it neither stimulates nor restricts growth, while underlying inflation is set to rise slowly, Gov. Kazuo Ueda said Tuesday. “The current rate is below neutral,” Ueda said during a panel discussion at the European Central Bank’s annual conference in Portugal. (WSJ)
• Bonds with longer durations have more appeal in Europe, as well as parts of Asia, than they do in the U.S., says BlackRock's Rick Rieder in a note. "In a market environment marked by heightened uncertainty and unreliable correlations, the case for a larger allocation to stable, income-generating investments has never been stronger," the CIO of global fixed income says. (Dow Jones Newswires)

WSJ Pro Central Banking brings you central banking news, analysis and insights from WSJ’s global team of reporters and editors. This newsletter was compiled by news associate Roshan Fernandez in New York. Send your tips, suggestions and feedback to roshan.fernandez@wsj.com.