Making Sense
In Brief | The week ahead for markets and the economy
Inflation Data | Retail Sales | Geopolitical Developments | Monday, August 11, 2025
Blake: Last week, markets continued to process a highly complex outlook following weaker economic data and the enactment of new tariffs alongside a quite robust corporate earnings season.
This week, the outlook will get a significant dose of clarity with the release of the July Consumer Price Index report on Tuesday. The Fed wants to cut rates, and the market expects them to, yet inflation is still above target. Forecasters expect inflation to move even higher in next week's report, with the core measure, ex-food and energy, projected to rise to 3.0%. This dynamic is already awkward given the market's current high conviction in expecting multiple rate cuts starting next month, so any upside surprise could inject significant market volatility.
On Thursday, we'll see another inflation report, the Producer Price Index, that measures businesses' intermediate and input costs and could reflect some tariff effects. Forecasters expect this series to move higher as well.
On Friday, the monthly retail sales report will offer some insight into household spending behavior in July. With the recent jobs data showing notable weakness in the labor market, markets will be waiting to see if there's any spending data that show corresponding softness in consumer demand.
Lastly, markets will be attuned to ongoing geopolitical developments, particularly as the White House signaled last week that it's considering using additional measures in its negotiations with China and Russia.
So things to watch in this busy week ahead. One, consumer price inflation. Two, producer price inflation. Three, retail sales. And four, geopolitical developments.
Authors
Brent Ciliano CFA | SVP, Chief Investment Officer
Capital Management Group | First Citizens Bank
8510 Colonnade Center Drive | Raleigh, NC 27615
Brent.Ciliano@FirstCitizens.com | 919-716-2650
Phillip Neuhart | SVP, Director of Market & Economic Research
Capital Management Group | First Citizens Bank
8510 Colonnade Center Drive | Raleigh, NC 27615
Phillip.Neuhart@FirstCitizens.com | 919-716-2403
Blake Taylor | VP, Market & Economic Research Analyst
Capital Management Group | First Citizens Bank
8510 Colonnade Center Drive | Raleigh, NC 27615
Blake.Taylor@FirstCitizens.com | 919-716-7964
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