Week of August 10 - August 14, 2026

This was the inflation week that had to answer for the July 29 FOMC, where three Fed presidents dissented in favour of a HIKE -- the first three-way dissent since September 2016 -- leaving the funds rate at 3.50-3.75%. It arrived with the labour market already wobbling: July nonfarm payrolls printed -23K against a +83K consensus on August 7, the first outright decline of the cycle. Wednesday's July CPI landed exactly on consensus at +0.1% MoM headline and +0.2% core, with the annual rates easing to 3.4% and 2.5%, both a tenth lower than June. Energy did the work, falling 1.5% on the month even though it remains 14.7% higher than a year ago, while shelter contributed roughly two-thirds of the monthly gain at just +0.1%. Thursday's PPI went further, coming in flat versus a +0.2% forecast as goods prices fell 0.7% on a 5.7% plunge in gasoline, dragging the annual rate down to 4.7% from 5.5%. The combination pulled September hike odds down to roughly a third and sparked a relief bid: gold rose about 0.5% to near $4,436 and Bitcoin reclaimed $64K. Friday closes the week with July retail sales and the preliminary August University of Michigan sentiment reading -- the consumer is now the open question, with sentiment expected to slip back to 54.1 and one-year inflation expectations stuck at 4.2%.