Economy

Governor Christopher Waller stated on September 3 that he would personally favor holding the federal-funds rate at its current 3.50–3.75 percent target if August inflation data showed continued progress, but would consider a hike at the September 15–16 FOMC meeting if the reading came in hot. Chair Kevin Warsh, in his August 28 Jackson Hole keynote, took a more emphatic tone on above-target inflation, noting that 54 percent of PCE basket items rose more than 3 percent over the prior year, though he stopped short of explicitly calling for a September increase. The August CPI release, scheduled for September 11, will inform Waller's individual vote but does not represent a formal FOMC commitment from either official.

The U.S. goods-and-services trade deficit widened by $17.4 billion in July 2026, driven by a $14.4 billion jump in capital goods imports — led by computers and semiconductors — while exports fell $6.6 billion, largely on declines in crude oil and nonmonetary gold. Despite the sharp monthly deterioration, the cumulative January-through-July deficit is running $188.4 billion, or 29.6 percent, below the same period in 2025. The monthly and year-to-date figures use different comparison bases and the official release does not establish a causal link between the capital goods surge and any specific policy or buyer.

Australia's June-quarter GDP came in at 0.4 percent quarterly and 2.1 percent annually, both above consensus forecasts, while trimmed-mean inflation held at 3.6 percent through July. The stronger data pushed market-implied odds of an RBA rate hike at the September 28–29 meeting to between 57 and 70 percent depending on the snapshot. Australia's four major banks remain split, with NAB forecasting a September increase to 4.60 percent, CommBank and ANZ expecting the move in November, and Westpac projecting no further hike through year-end.