Weekly Recap

1. Jackson Hole Global Central Bank Symposium On August 22, Federal Reserve Chairman Jerome Powell opened the door for a September rate cut during his speech at Jackson Hole. In his remarks, he stated that "the baseline outlook and evolving balance of risks may warrant adjustments to our policy stance." Powell's speech addressed both economic prospects and the Fed's new policy framework. He specifically noted that inflation risks remain "tilted to the upside" and indicated that tariff-related inflationary pressures "are now clearly visible." Data from CME Group shows that market expectations for a September rate cut surged to over 90% directly following his speech.

2. Fed Releases Monetary Policy Meeting Minutes On August 20 local time, the Federal Reserve released the minutes from its July monetary policy meeting. Fed officials unanimously agreed that US economic activity growth slowed in the first half of the year while inflation levels remained elevated. Tariff impacts became more evident in commodity prices. As economic activity and consumer spending growth decelerated, downside risks to the US labor market increased significantly, creating uncertainty for economic growth prospects. Meanwhile, most Fed officials expressed greater concern about inflation risks compared to labor market conditions, agreeing to maintain the federal funds rate target range unchanged at 4.25%-4.5%.

3. US Imposes Steel and Aluminum Tariffs On August 19 local time, the US Department of Commerce announced the inclusion of 407 product categories in the steel and aluminum tariff list, subject to a 50% tax rate. The Commerce Department stated that the new list covers a wide range of products including wind turbines and components, mobile cranes, railway vehicles, furniture, compressors and pump equipment, among hundreds of other items. Previously, on August 15 evening, the Commerce Department announced that the Bureau of Industry and Security had added 407 product codes to the US Harmonized Tariff Schedule, with these products subject to additional tariffs due to their steel and aluminum content. The announcement noted that non-steel and aluminum portions of these products would be subject to tariff rates imposed on goods from specific countries. The expanded tariff list took effect on August 18.

US Stock Market On August 22, all three major US stock indices closed higher. The Dow Jones Industrial Average rose 846.24 points or 1.89% to 45,631.74 points, breaking above the record closing high of 45,014.04 points set on December 4, 2024, with a weekly gain of 1.53%. The S&P 500 index gained 96.74 points or 1.52% to 6,466.91 points, approaching the record closing high of 6,468.54 points set on August 14, with a weekly gain of 0.27%. The Nasdaq index surged 396.223 points or 1.88% to 21,496.535 points, with a weekly gain of 0.58%.

US Dollar Index The US Dollar Index fell 0.96% on August 22 to 97.66 points. Fed Chairman Powell indicated possible rate cuts at the September meeting but made no commitment. The index was trading around 98.7 points before Powell's speech, with the dollar index declining slightly for the week. Analysts noted that Powell's speech was much more dovish than market expectations, with the dollar falling and September rate cut probabilities rising as market participants are clearly preparing for more accommodative policy ahead.

Gold Gold prices rebounded on August 22, with spot gold rising 1.1% to $3,373.89 per ounce. US gold futures gained 1.1% with settlement at $3,418.50. Gold prices rose over 1% for the week. Analysts interpreted Powell's speech as a dovish shift that could pressure the dollar and drive gold higher again. BMI, a research company under Fitch, raised its 2025 gold price forecast by $150 this week to $3,250 per ounce.

Crude Oil Oil prices stabilized on August 22 amid uncertainty over potential peace agreements between Russia and Ukraine, with oil prices rising for the first time in three weeks. Brent crude futures closed up 0.09% at $67.73. US crude futures settlement price rose 0.22% to $63.66. Both contracts gained over 1% in the previous trading session. For the week, Brent crude futures rose 2.9% while US crude futures gained 1.4%.

This Week's Key Events Outlook

1. US July PCE Price Index YoY On August 29, the US will release the July PCE price index. US services inflation is accelerating upward with tariff impacts becoming prominent. The June PCE price index showed 2.6% year-over-year growth, above the expected 2.5%, with the previous value revised up 0.1 percentage point to 2.3%. The month-over-month reading of 0.3% matched expectations. Meanwhile, consumer spending showed signs of fatigue. Inflation-adjusted real consumer spending increased only 0.1% in June, meeting expectations but failing to reverse the previous month's decline.

2. US July Durable Goods Orders MoM Initial Value On August 26, the US will release the July durable goods orders month-over-month initial value. Last month, US June durable goods orders plummeted 9.3% month-over-month, slightly better than market expectations but still the worst performance since the 2020 pandemic. This sharp volatility was mainly due to significant adjustments in non-defense aircraft orders, shifting from a 230% month-over-month surge in May to a 50% decline in June.

3. China August Official Manufacturing PMI On August 31, China will release the August official manufacturing PMI. Last month, the manufacturing PMI fell to 49.3%, showing a decline in manufacturing prosperity levels from the previous month. The new orders index was 49.4%, indicating some slowdown in manufacturing market demand. "Anti-involution" policy effects are beginning to differentiate - while price expectations improved immediately, production began to slow in phases. After entering a new trade phase, export prosperity changed, with the leading PMI new export orders index signaling marginal downward pressure on July exports.

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