Both the CPI and PPI came in precisely within expectations. Under the current circumstances, there is now a very high probability that the Federal Reserve will implement a quarter-point rate cut, a view widely shared by industry analysts. There is also a strong possibility of another cut to follow.

The release of major inflation data has once again arrived with the Consumer Price Index and the Producer Price Index, offering insight into the current state of the economy. Based on recent statements from the Federal Reserve, there is considerable speculation that rate cuts may occur regardless of the trajectory of inflation.

With the release of the PCE Index, inflation has shown to still be creeping upwards but there is significant speculation that the Federal Reserve will continue with their interest rate cut in the future. Meanwhile, the Consumer Sentiment report has been growing pessimistic amidst the job market, which has been shown to be in a pattern of cooling down.

This is offset by the strong growth by the GDP estimates for the second quarter, as it was initially predicted the tariff changes would have a significant impact on the GDP estimates, but the impact has been less prominent than expected.

The FOMC meeting that was held the previous week to discuss upcoming decisions addressed the future of the economic landscape.

During his remarks, Jerome Powell stated that inflation will rise in the future, with consumers bearing the burden. Many have speculated that this means reductions in current rates are unlikely to happen anytime soon, in an attempt to keep inflation under control.

Another notable release was the leading economic indicators, which once again showed contraction–signaling the potential for further economic decline.