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Hotter July Inflation Puts Fed in a Tight Spot as Economists Debate Next Move

July’s inflation data has economists worried, with wholesale prices hitting a three-year high and services costs—from dental care to airfare—rising faster than expected. The Federal Reserve now faces a dilemma: slowing job growth argues for rate cuts, but persistent inflation pressures suggest restraint or even further hikes. Some economists warn that inflation is the “risk on our doorstep,” fueled by wages, energy, and tariffs, while others highlight weakening manufacturing, housing, and hiring as signs the economy is already slowing. Markets still expect a September rate cut, but Fed Chair Jerome Powell’s upcoming Jackson Hole speech may determine whether inflation or growth takes priority. Read More.

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Investors Brace for Powell’s Jackson Hole Speech as Stocks Face Unusual Risk

Historically, stocks tend to rise during the Fed’s annual Jackson Hole symposium, but analysts warn this year could break the trend. Fed Chair Jerome Powell speaks Friday under intense White House pressure to cut rates, with markets pricing in an 80% chance of a September cut. However, if Powell signals caution or acknowledges labor market weakness, equities—already at lofty valuations—could face sharp pullbacks. Treasury prices have also historically risen during the event, but uncertainty around policy direction may fuel volatility across markets. Economists warn equity investors may want to “take some chips off the table” ahead of Powell’s high-stakes remarks. Read More.