Occasionally, the amount of economic data made available in a short time can seem overwhelming. Such is the case this week, where the “main event” is the Federal Open Market Committee (FOMC) meeting on Wednesday, but inflation, employment, consumption, and housing data for Q2 and July all appropriately deserve equal attention. Thankfully, much of the important data will be in the Federal Reserve’s hands before the final decision on interest rates is announced, assuming that the Federal Reserve is willing to look at the ADP employment data as a proxy for the NonFarm Payrolls data that will be released later in the week (see my earlier comments on why ADP has gained significance because of the survey data problems being experienced by the Bureau of Labor Statistics.) However, the Federal Reserve’s preferred measure of inflation, the Personal Consumption Expenditures Index (PCE), will not be released until the day after the FOMC decision. Contrary to some beliefs, the Federal Reserve will have no advance information on that number beyond its own modeling. Very few Fed watchers—other than the most important Fed watcher of all, residing in the White House—have assigned much importance to this FOMC meeting, since the overriding view is that there is not yet enough data to move this data-driven Fed to a rate cut. Yet the absence of a rate cut does not mean that there will not be significant policy action taken. If the June data, and the associated data for the second quarter of 2025, illustrate ongoing economic strength, then the FOMC is likely to emphasize that future rate cut decisions will be very heavily based on the inflation track. Conversely, if June data, especially for employment, gives reason to anticipate slower economic growth in the third quarter, the FOMC is likely to start “pre-announcing” Fall rate cuts. Either way, it is unfortunate that the PCE numbers will be released the day after the FOMC announcement, and potentially politically awkward unless those numbers show, as they may in fact do, growing upward pressure on prices from tariffs.
Data to Watch
- US GDP growth rate for Q2, first estimate, released Wednesday, July 30
- US Pending Home sales for June, released Wednesday, July 30
- Federal Open Market Committee (FOMC) Interest Rate Announcement and press conference with Fed Chairman Powell, Wednesday, July 30
- Personal Consumption Expenditures (PCE) inflation index for June, released Thursday, July 31
- US Personal Income and Personal Spending for June, released Thursday, July 31
- NonFarm Payrolls and Unemployment Rate for July, released Friday, August 1
Suggested Reading
- Trump and EU Reach Tariff Deal, Avoiding Trade War
- ‘Unprecedented’ Investment Fund Seals Deal for Japan and Expands Trump’s Influence
- The AI explosion means millions are paying more for electricity
Weekly Commentary
Economic Commentary – July 28, 2025
Jeanette Garretty
Occasionally, the amount of economic data made available in a short time can seem overwhelming. Such is the case this week, where the “main event” is the Federal Open Market Committee (FOMC) meeting on Wednesday, but inflation, employment, consumption, and housing data for Q2 and July all appropriately deserve equal attention. Thankfully, much of the important data will be in the Federal Reserve’s hands before the final decision on interest rates is announced, assuming that the Federal Reserve is willing to look at the ADP employment data as a proxy for the NonFarm Payrolls data that will be released later in the week (see my earlier comments on why ADP has gained significance because of the survey data problems being experienced by the Bureau of Labor Statistics.) However, the Federal Reserve’s preferred measure of inflation, the Personal Consumption Expenditures Index (PCE), will not be released until the day after the FOMC decision. Contrary to some beliefs, the Federal Reserve will have no advance information on that number beyond its own modeling. Very few Fed watchers—other than the most important Fed watcher of all, residing in the White House—have assigned much importance to this FOMC meeting, since the overriding view is that there is not yet enough data to move this data-driven Fed to a rate cut. Yet the absence of a rate cut does not mean that there will not be significant policy action taken. If the June data, and the associated data for the second quarter of 2025, illustrate ongoing economic strength, then the FOMC is likely to emphasize that future rate cut decisions will be very heavily based on the inflation track. Conversely, if June data, especially for employment, gives reason to anticipate slower economic growth in the third quarter, the FOMC is likely to start “pre-announcing” Fall rate cuts. Either way, it is unfortunate that the PCE numbers will be released the day after the FOMC announcement, and potentially politically awkward unless those numbers show, as they may in fact do, growing upward pressure on prices from tariffs.
Data to Watch
Suggested Reading
Disclosure and Source
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