Daily update
Daily update
- The Federal Reserve minutes make it clear that rate cuts are coming (some wanted to cut in July). The Fed is late, and is now going to have to scramble after the decline in inflation, in an undignified manner. Policy operates with a lag, so the economic benefit of these cuts will take some time to come through (policy lags are why “data dependency” is so dangerous). The Jackson Hole summer camp for central bankers gets underway, and between marshmallow roasting and campfire songs there is a chance for some interest economic papers.
- Eurozone second quarter wage settlement data is due. This is important, though not necessarily market moving. The link between wage increases and inflation is relatively loose—automation and productivity offset wages, and profits may be pressured instead of prices.
- US initial jobless claims will continue to receive attention as the aftermath of the rogue US employment report lingers, somewhat. The data should confirm that there is unlikely to be a meaningful increase in fear of unemployment, especially among middle-income consumers.
- Assorted business sentiment opinion polls are due. Investors are advised to read the comments section of the Dallas Fed manufacturing sentiment poll to get an idea of the sort of people who answer surveys.
