Economic Outlook & Inflation - The risk is that real estate prices are going down, with residential real estate constituting a significant portion of the CPI (one-third) and core CPI (40%) [1] - The employment report is crucial for determining whether the Fed will rekindle rate cuts at the September meeting [3] - Real work-based income, adjusted for inflation, is contracting, posing a challenge to the labor market [4] - Agricultural prices are rising globally, linked to climate change, while goods prices in general, including furniture and appliances, are expected to rise in the coming months [6][7] - 60% of the CPI is in services, which are disinflating, creating a tug-of-war with rising goods prices [8] Monetary Policy & Tariffs - The Fed is unlikely to provide clear guidance and will closely monitor the labor market to determine interest rate adjustments [5] - The 90-day pause on reciprocal tariffs deadline is a pivotal event, with the market watching for its impact on the US economy [2] - The extent to which the service sector will offset the goods inflation from tariffs is a key question [7] Labor Market - Cracks emerging in the labor market and a loosening up will make the Fed feel more relaxed about goods inflation if it doesn't feed into wages [3] - The employment number, including headline figures, revisions, unemployment rate, and participation rate, is critical [4]