Macro The key driver for markets this week was the increase in the PCE index, the Federal Reserve’s preferred measure of inflation. U.S. consumer spending rose in July at its fastest pace in four months, supported by solid income growth despite persistent price pressures. While households remain resilient, the outlook is becoming increasingly uncertain as job growth slows and inflation expectations edge higher. Core PCE climbed to 2.9% year-over-year, its…

Macro Fed Chair Jerome Powell signalled a potential rate cut in September during his Jackson Hole remarks, triggering a strong rally in equities, bonds, and even Bitcoin. The key key sentence in Fed Chair Powell’s Jackson Hole speech: “with policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance.” Powell emphasised that the balance of risks has shifted, suggesting the Fed…

Macro Consumer sentiment weakened for the first time since April, as rising inflation expectations unsettled markets despite otherwise solid retail data. The latest CPI and PPI prints deepened uncertainty over the Federal Reserve’s next move. July’s CPI came in broadly in line with expectations, showing only modest tariff-related impacts, while PPI surprised to the upside due to stronger services costs, including trade services. Analysts expect limited pass-through to July core…

Macro This week’s data offered a mixed picture for the U.S. economy. The July ISM Services index came in below expectations, with the employment component sinking further into contraction territory while the prices index climbed to its highest level since October 2022. The NY Fed’s Survey of Consumer Expectations showed inflation expectations moving higher, with the 1-year outlook up 10 bps to 3.0% and the 5-year up 30 bps to…

Macro The July jobs report painted a much weaker picture of the U.S. labour market than previously thought, sparking concerns across financial markets. Markets responded swiftly: equities sold off, bonds rallied, and traders repriced expectations for Fed cuts, now anticipating two reductions this year. The unemployment rate ticked up to 4.2%, while underemployment reached 7.9%. Job growth was narrowly concentrated, with 79,000 new positions in private education and healthcare, while…

Macro Recent U.S. economic data continue to show that Trump’s policies have yet to produce any meaningful impact on inflation or growth. The consensus expectation of an inflationary shock has not materialised. Inflation remains close to the Fed’s 2% target, while activity indicators suggest continued strength, with recent business surveys showing the fastest pace of private-sector expansion this year. Even before measurable inflationary effects appear, tariff revenues have already begun…