Week ahead the uncertain markets brace for employment data

The U.S. economy continues to send mixed signals as it approaches a key juncture in its monetary policy. This is the case despite the news leaning positive last week. Latest data from the Bureau of Economic Analysis has printed a positive revision of the GDP growth rate for Q2 2024, up to 3% from the initial 1.3%.

This came together with an unchanging Core Personal Consumption Expenditures (PCE) Price Index—the Federal Reserve’s preferred measure of inflation. Held steady at 2.6% year-on-year, this figure when accounted for month-on-month, prints at 0.2%, well within the regulator’s expectations. This stability in inflation coupled with economic growth suggests that the Federal Reserve might lean towards a more conservative rate cut of 25 basis points, rather than the more aggressive 50 basis points.

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