Group 1 - Waller, a Federal Reserve governor, advocates for an immediate interest rate cut of 25 basis points at the upcoming FOMC meeting on September 16-17, and anticipates further cuts in the next three to six months [1][2] - Waller believes that the potential inflation rate in the U.S. is nearing the Fed's long-term target of 2%, and that the labor market may show signs of weakness, warranting a risk management approach that includes an immediate rate cut [1][2] - Waller's stance reflects a growing divergence among Fed officials regarding the impact of tariffs on inflation, as he suggests that the Fed should "ignore" these effects, viewing them as temporary [2] Group 2 - Waller's support for a rate cut aligns with his potential candidacy for the next Fed chair, as he has consistently expressed concerns about high rates in an economy lacking inflationary pressure [2][3] - The recent dissent among Fed governors regarding interest rate decisions is notable, marking the first time since 1993 that multiple governors have opposed a rate decision, indicating a fracture in consensus on economic and inflation impacts [2] - Economic advisor Stephen Miran has praised Waller's performance at the Fed, highlighting his impressive predictions on inflation and policy recommendations [3]

Group 1 - Initial jobless claims in the U.S. decreased by 5,000 to 229,000, indicating employers are retaining existing employees despite economic uncertainty [1] - The four-week moving average of initial jobless claims rose to 228,500, suggesting a trend of stability in the labor market [1] - The unemployment rate is projected to rise to 4.3% in August, up from 4.2% in July, reflecting a weak hiring environment [2] Group 2 - The U.S. labor market is experiencing a "no hiring, no firing" situation due to protectionist trade policies, with average import tariffs at a century-high [2] - Average job growth over the past three months is only 35,000, significantly lower than the 123,000 jobs expected for the same period in 2024 [2] - Continuing claims for unemployment benefits decreased by 7,000 to 1.954 million, indicating a slight improvement in hiring conditions [2] Group 3 - Consumer sentiment regarding job availability has worsened, with the percentage of consumers believing jobs are hard to find reaching a four-and-a-half-year high [3] - The stability of the unemployment rate is attributed to low levels of layoffs, while a slowdown in labor force growth may mask underlying issues in the labor market [3]

Core Insights - The employment market in Bosnia is experiencing a decline in job openings while job-seeking demand continues to rise [1] Recruitment Market Analysis - In the first half of 2025, a total of 5,398 job advertisements were published, offering 10,540 job positions, which represents an 18% decrease in job ads and a 22% decrease in job positions compared to the same period last year [1] - Overall, the recruitment market in Bosnia saw a 24% drop in advertisement volume, indicating a significant contraction in employment supply [1] - Despite the decrease in job advertisements, the demand for job seekers remains stable, with a total of 186,300 job applications received, which is roughly unchanged from the previous year [1] Job Application Trends - The average number of applications per job position increased by 28%, rising from 14 applications to 18 applications [1] - The average view count per job advertisement has increased by over 20% [1] Industry Demand - The highest demand for job positions is concentrated in five key sectors: business/sales, electrical engineering and mechanical engineering, transportation and logistics, manufacturing, and hospitality/tourism [1]

Core Viewpoint - The Jackson Hole Symposium this year highlighted the challenges faced by the Federal Reserve, with Chairman Powell indicating a potential interest rate cut in September, amidst conflicting economic signals and political pressures [5][6][7]. Group 1: Economic Signals and Fed's Dilemma - The Federal Reserve is grappling with inflation above the 2% target and signs of a weakening labor market, creating a complex environment for decision-making [5][6]. - Chicago Fed President Goolsbee noted the conflicting signals and the difficulty of timing policy changes during transitional periods [6]. - Powell's remarks suggested that tariffs are impacting prices, but the long-term effects on inflation remain uncertain [7]. Group 2: Political Pressures - Political pressure on the Fed is intensifying, particularly from President Trump, who is advocating for rate cuts and threatening to dismiss officials over controversies [6][7]. - The atmosphere at the symposium was notably tense, with increased security measures reflecting the heightened scrutiny of the Fed's actions [6]. Group 3: Fed's Policy Framework - Powell introduced a new framework aimed at guiding the Fed's approach to achieving inflation and employment targets, marking a shift from previous strategies [8]. - This new strategy emphasizes the importance of an independent Federal Reserve in addressing economic challenges effectively [9][10]. Group 4: Global Economic Implications - Following Powell's speech, the euro strengthened against the dollar, raising concerns about potential downward risks to inflation in the Eurozone [11]. - The interconnectedness of the U.S. economy with global markets means that a slowdown in U.S. growth could have significant implications for other economies [11].

Economic Overview - The U.S. economy's GDP growth slowed to 1.2% in the first half of 2025, approximately half of the 2.5% growth rate expected for the first half of 2024[2] - The unemployment rate increased to 4.2%, with non-farm payroll growth averaging only 35,000 jobs per month from May to July 2025, significantly below the 2024 average[2] Inflation and Monetary Policy - July 2025 CPI rose by 2.7% year-on-year, while core CPI increased by 3.1% year-on-year, indicating persistent inflation pressures[2] - Powell emphasized the uncertainty surrounding the natural unemployment rate and the need for a balanced approach when employment and inflation targets conflict[1] Policy Framework Changes - The Federal Reserve announced a shift back to a flexible inflation targeting framework, abandoning the previous compensatory strategy adopted in 2020[3] - The consensus statement removed references to the "employment shortfall," highlighting the uncertainty in estimating the natural unemployment rate[3] Future Outlook - The probability of a rate cut in the September meeting has increased, reflecting concerns over the labor market's fragility and potential economic downturns[6] - The adjustments in monetary policy framework may lead to increased market volatility due to reduced predictability in future policy paths[5]

Core Points - Federal Reserve Chairman Jerome Powell has paved the way for a potential interest rate cut next month, but two upcoming economic reports could disrupt Wall Street's expectations [1][2] - The market currently anticipates a 75% chance of a 25 basis point rate cut at the Fed's mid-September meeting, with many economists predicting further cuts by late 2025 [1] - Powell's cautious stance indicates that a strong August jobs report or concerning inflation data could delay the rate cut [1][2] Economic Reports - The upcoming employment and Consumer Price Index (CPI) reports, scheduled for September 5 and 11, will provide critical signals regarding the economy [2] - July's non-farm payroll data showed a significant slowdown in hiring, although the unemployment rate remains low at 4.2%, which mitigates some market concerns [2] - The CPI rose by 2.7% year-over-year in July, while the preferred Personal Consumption Expenditures (PCE) price index had an annualized growth rate of 2.6% in June, above the Fed's 2% target [2] Internal Fed Dynamics - There is ongoing debate within the Federal Open Market Committee (FOMC) regarding the impact of tariffs on inflation, with some members expressing uncertainty about the potential for sustained inflation [3] - St. Louis Fed President James Bullard noted that inflation is closer to 3% rather than the Fed's target of 2%, suggesting a possibility of persistent inflation [3] - Some FOMC members, including Boston Fed President Susan Collins, believe more time is needed to assess the situation before making decisions on rate cuts [3] Political Pressure - Powell faces significant pressure from the White House, with President Trump advocating for a drastic reduction in interest rates and criticizing Powell's decisions [4] - Despite the political pressure, Powell's recent speech at Jackson Hole was well-received, indicating support from other central bank leaders [4] - The internal dissent within the FOMC is notable, as two members voted against Powell's stance in the last meeting, marking a rare occurrence in recent history [4]

Core Viewpoint - The speech by Federal Reserve Chairman Jerome Powell at the Jackson Hole global central banking conference is interpreted as a signal for potential interest rate cuts in September, but deeper analysis reveals a complex balancing act between a weakening labor market and persistent inflation risks [1][2]. Group 1: Dual Mandate Challenges - The current economic environment presents a more complicated scenario for policymakers compared to the clear objectives during the inflation peak of 9.1% in 2022 [2]. - Powell emphasized the need to balance the dual mandate of promoting full employment and maintaining price stability, indicating that the path to potential rate cuts may be slower and more uncertain than market expectations [3][4]. Group 2: Labor Market Risks - A key point often overlooked is that potential rate cuts may stem from concerns over economic deterioration rather than a strong economy [4]. - Powell noted a "peculiar balance" in the labor market, with both supply and demand significantly slowing, partly due to tightened immigration policies, which raises the risk of job losses and increased unemployment [4][6]. Group 3: Inflation Concerns - Despite worries about the labor market, inflation risks remain, with economists concerned that tariffs from the Trump administration could raise prices in the coming months [6]. - Powell seems to lean towards ignoring the impact of tariffs, but he cautioned against assuming that inflation expectations will remain stable, acknowledging the potential for inflationary pressures [6][7]. Group 4: Market Reactions - The market's reaction to Powell's speech may have been exaggerated, possibly due to prior expectations of a more hawkish stance, leading to position adjustments [7]. - Powell's remarks did not yield to political pressure for significant rate cuts, indicating a careful approach to navigating current economic challenges [7].

Core Viewpoint - Goldman Sachs indicates that if the non-farm employment growth in September is below 100,000, it will help determine the likelihood of a rate cut in September, with concerns about the labor market's downward risks highlighted by Powell [1][2][13] Employment Data Concerns - Goldman Sachs expresses worries about future employment growth revisions leaning negative due to several factors, including overly optimistic birth-death models and historical trends of negative revisions during economic slowdowns [3][4] - The firm notes that the ADP data raises questions about healthcare sector employment growth, and household surveys may be overestimating immigration and job growth [4] Labor Market Outlook - The company is particularly concerned that the "catch-up hiring" in a few sectors seems to have ended, with employment growth outside these sectors nearing zero [5] - There is significant uncertainty regarding balanced employment growth, with Goldman estimating a balanced level of around 80,000 jobs, making the current average growth of 35,000 jobs concerning [6] Rate Cut Path - The path for rate cuts is heavily dependent on labor market performance, with the current window for observing significant slowdowns in employment data being now [7] - Goldman Sachs emphasizes the high level of market focus on the August non-farm data, given the scale of previous data revisions, which raises concerns [9] Future Rate Cut Expectations - The firm believes that regardless of whether the economy is slowing or normalizing, there is a strong possibility that the rate cut cycle will conclude by mid-2026, coinciding with the next Federal Reserve chair's term [10][14] - The current yield curve in June 2026 is flat, providing a framework for future policy considerations [11]

Core Viewpoint - The Federal Reserve is cautiously opening the door to interest rate cuts, but the path ahead is fraught with challenges, as Chairman Powell signals a careful strategy rather than aggressive easing [3][4]. Group 1: Labor Market Concerns - Powell describes the labor market as "peculiar," indicating that the seemingly stable unemployment rate masks a decline in both labor supply and demand [5][6]. - He warns against focusing solely on supply-side constraints, such as immigration policy, which may overlook weakening demand signals that could lead to a rapid deterioration in the job market [5][6]. - A cooling labor market could serve as a mechanism to prevent a vicious cycle of rising wages and prices driven by tariffs [5][6]. Group 2: Internal Disagreements and Inflation Concerns - Despite Powell's efforts to build consensus, there is significant resistance within the Federal Reserve regarding the rationale for rate cuts, with some officials arguing that inflation remains too high [6]. - Cleveland Fed President Beth Hammack expresses skepticism about the temporary nature of tariff-driven price increases, while St. Louis Fed President Alberto Musalem notes that businesses are testing their pricing power [6]. - Concerns about inflation are echoed outside the Fed, with economists warning that Powell's dovish stance may underestimate inflation pressures and overstate labor market risks [6]. Group 3: Cautious Easing Approach - Powell's cautious tone this year contrasts sharply with his assertive stance from the previous year, reflecting a fundamental shift in economic conditions [7]. - The current environment of "high inflation, low interest rates" necessitates a more restrained approach to monetary easing, limiting the potential for significant declines in mortgage rates and borrowing costs [7]. - There are warnings that premature rate cuts could lead to a reversal in policy direction, potentially damaging the Fed's credibility and leading to perceptions of tolerance for inflation above the 2% target [7].

Core Viewpoint - Federal Reserve Chairman Powell has paved the way for a rate cut in September, but the key remains whether the upcoming non-farm payroll data can provide decisive guidance on the pace and magnitude of the cuts [1][9] Employment Data Concerns - Goldman Sachs indicates that future employment growth revisions are likely to be negative due to several factors [2] - The birth-death model may be overly optimistic [3] - Historical data revisions during economic slowdowns tend to be negative [3] - ADP data raises questions about healthcare sector employment growth [3] - Household surveys currently overestimate immigration and employment growth [3] Labor Market Performance - The outlook for employment growth is bleak, with a significant uncertainty regarding balanced employment growth [3] - Goldman Sachs estimates a balanced employment growth level of around 80,000, while the three-month average growth is concerning at 35,000 [3] - The substantial revision of July data has raised concerns for the Federal Reserve about potentially delayed responses to an impending economic slowdown [3] Rate Cut Path - The window for a more significant slowdown in employment data is currently open [4] - Market focus on August non-farm data is heightened due to previous data revisions [4] - The Federal Reserve is on track for a September rate cut, followed by cautious observation of the labor market for signs of further weakness [4] Rate Cut Cycle Completion - Goldman Sachs believes there is a high likelihood that the rate cut cycle will conclude by mid-2026, regardless of whether the economy is slowing or normalizing [5][7] - Powell's term as Fed Chairman ends in May next year, which may coincide with the end of the rate cut cycle [5] Yield Curve Considerations - The U.S. yield curve is currently flat as of June 26/28, 2026, providing a framework for future policy considerations [6]