Weekly Market Update

[Andrew Postell]

Inflation Still a Problem

Last week’s economic data offered mixed signals for inflation and consumer strength. July’s CPI rose 0.2% month-over-month (2.7% year-over-year), suggesting easing price pressures, while PPI surged 0.9%, pointing to persistent wholesale inflation. Retail Sales showed steady but cautious consumer spending. These figures have tempered expectations for aggressive Fed easing, though markets still largely anticipate a 25bps rate cut in September. The Fed is likely to remain data-dependent, especially with the Jackson Hole Symposium approaching.

Powell Speech this Week's Main Event

This week, investors are watching housing data, FOMC minutes, and global flash PMIs for further clues on economic momentum. The Fed’s annual Jackson Hole Symposium (Aug 21–23) will be a focal point, with Chair Powell’s keynote expected to clarify the Fed’s stance. The theme—labor markets in transition—underscores the Fed’s challenge in balancing inflation and employment amid demographic shifts and productivity changes. Powell’s tone could sway rate expectations and market sentiment heading into fall.

Interest Rates Tic Higher

Interest rates are slightly higher from a week ago after last week's inflation data with the 30-year fixed mortgage at back in the mid-to-high 6s. Treasury yields have risen from recent lows as well amid slowing expectations for Fed easing. Fixed income remains attractive for yield and downside protection, with the yield on the US 10yr note trading at 4.33%.

Key Economic Data Releases this Week:

• Tuesday, August 19: Housing Starts, Building Permits
• Wednesday, August 20: FOMC Meeting Minutes
• Friday, August 22: Powell's Jackson Hole Speech, Philly Fed

WEEKLY INTEREST RATE SNAPSHOT