The Market Brief
U.S. futures edged lower as traders cut risk ahead of Friday’s U.S. inflation data, which may test expectations on how quickly the Federal Reserve can reduce interest rates.
Impact Snapshot
🟥 PCE Inflation - 8:30am
🟧 Consumer Sentiment - 10:00am
Macro Viewpoint
Fed Chair Jerome Powell’s dovish remarks at Jackson Hole strengthened expectations for the first rate cut of the year next month, though uncertainty remains about the path beyond that, as inflation continues to run above target.
Friday’s data is projected to show core personal consumption expenditures climbing 2.9% in July, marking the fastest increase in five months.
Policymakers will need to weigh persistent price pressures against next week’s anticipated data, which is expected to show a rise in unemployment.
With focus turning to signs of a cooling labor market, any outcome short of a significant upside surprise is unlikely to shake expectations for a September rate cut, potentially followed by another before year-end.
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