All eyes are on Tuesday's CPI report and the Fed’s September meeting, where the central bank must weigh sticky inflation against a softening labor market. Watch for:
- How fast tariff-driven price hikes spill over from goods into services and expectations
- The stability of the extended US-China truce—and any signals for a more lasting agreement
- Market reaction if soft inflation data collides with continued AI and tech stock exuberance
The question lingering over markets: Can Fed rate cuts soften the blow of inflation and trade tensions, or has the “TACO trade”—the expectation that tariff threats will always be walked back—finally gotten stale? Buckle up for a data-heavy week.
