Markets ended the week higher, with the S&P 500, Dow Jones Industrial Average, and NASDAQ all hitting new record highs, as investors looked ahead to this week’s Fed meeting where officials are expected to cut rates by 0.25%. Inflation and employment related data did little to refute that notion.
Inflation data released during the week pointed to continued upward pressure on prices but not alarmingly so. Measures of consumer inflation were generally in line with expectations while producer inflation was weaker than expected.
Additional employment-related data released during the week corroborated other recent reports indicating deteriorating labor market conditions. On Tuesday, the Bureau of Labor Statistics (BLS) released it preliminary revisions to annual job growth for the 12 months ending March 2025, showing 911K (52%) fewer jobs were created than initially reported. The report, combined with other recent employment data, suggests labor market weakness has been more pervasive than previously realized.
With markets treating the announcement of a 0.25% rate cut following the Fed’s meeting on Wednesday as a foregone conclusion, markets will be more focused on what Fed Chair Jay Powell’s has to say at his post-meeting press conference. Specifically, markets will be eager to see if Powell provides any indication as to whether he sees the September rate cut as potentially the first of several in the months ahead or continues to espouse a more wait-and-see approach with respect to economic data particularly regarding inflation and employment.
