{"id":666775,"date":"2025-09-08T13:05:36","date_gmt":"2025-09-08T11:05:36","guid":{"rendered":"https:\/\/ftmo.com\/?p=666775"},"modified":"2025-09-08T14:45:26","modified_gmt":"2025-09-08T12:45:26","slug":"can-inflation-data-push-the-fed-toward-a-bigger-cut","status":"publish","type":"post","link":"https:\/\/ftmo.com\/en\/can-inflation-data-push-the-fed-toward-a-bigger-cut\/","title":{"rendered":"Trading Week Ahead: Can Inflation Data Push the Fed Toward a Bigger Cut?"},"content":{"rendered":"
Markets enter a crucial week<\/strong> with traders watching the Fed’s next move. The question is no longer whether the Fed will cut rates<\/strong>, but by how much. A 25-basis-point cut is already priced in by most participants, though speculation around a deeper 50-basis-point move is building. This week\u2019s US inflation data<\/strong> will likely play a key role in shaping that decision.<\/em><\/p>\n \u2022 US PPI: First Look at Cost Pressures \u2022 US CPI: Will Inflation Justify a Larger Cut?<\/strong> \u2022 ECB Rate Decision<\/strong>
\n<\/strong>The Producer Price Index will provide an early signal on inflation trends. Markets expect the monthly figure to drop from 0.9% to 0.3%, suggesting easing input costs. While not as impactful as CPI, a surprise to the upside could renew concerns about sticky inflation. That may prompt the Fed to lean toward a smaller 25 basis point cut instead of going deeper with 50. This outcome would likely support the dollar and weigh on risk sentiment.<\/p>\n
\nMarkets forecast a 0.3% month-on-month increase in August CPI, slightly up from July\u2019s 0.2%. Although a rate cut is widely anticipated, this release could determine whether the Fed sticks with a quarter-point reduction or considers a more aggressive move. A stronger print would support a more cautious approach, likely boosting the dollar and yields. A weaker figure would strengthen calls for deeper easing and encourage risk-on positioning.<\/p>\n
\nThe ECB is widely expected to hold rates steady, but the tone of Lagarde\u2019s press conference will be critical. As eurozone growth continues to cool, any dovish hints or signals of future cuts could weaken the euro and lift European equities. A more balanced or hawkish message would likely keep the currency stable in the near term.<\/p>\n