Overview

• Fed Governor Christopher Waller said he would support a 25-basis-point cut on Sept. 16-17 and anticipates additional reductions over the next three to six months.
• He left open a larger move if the August jobs report shows substantial deterioration and inflation stays contained.
• July PCE inflation registered 2.6% year over year with core at 2.9%, reinforcing that price pressures remain above the 2% target.
• Markets put roughly 85%–89% odds on a quarter-point cut in September, with stocks near records and the dollar softer as traders position for easing.
• Weak July payrolls of 73,000 and sizable downward revisions set up next week’s jobs report as pivotal, while Governor Lisa Cook’s lawsuit to block her removal heads to a hearing Friday, raising independence questions.