Daily Newsletter 8/14/25

Index futures are down this morning after hitting record highs in recent sessions.

For the week ending August 9, seasonally adjusted initial jobless claims came in at 224,000, down 3,000 from the prior week’s revised level.

The previous week’s figure was revised upward by 1,000, from 226,000 to 227,000.

The four-week moving average rose to 221,750, an increase of 750 from the prior week’s revised average. That average was also revised up by 250, from 220,750 to 221,000.

The labor market data and inflation figures from recent weeks are likely to contribute to the Fed's ongoing data-driven approach—with the decision to hold rates steady for now but remain prepared to adjust policy if risks or signs of economic slowdown become clearer.

The recent data on initial jobless claims and the four-week moving average, which showed a slight decrease in weekly claims but a modest increase in the moving average, suggest a labor market that remains relatively solid but with some early signs of moderation. This labor market information, combined with inflation data showing core inflation rising more than headline inflation due to lower oil prices, reflects ongoing inflation pressures but also some transient effects in the data.

We anticipate that the Fed will likely keep rates unchanged in the near term, allowing more time to observe clearer trends in inflation and employment before making any adjustments. However, we also believe there is a reasonable possibility of a modest rate cut as early as September 2025, provided there is sustained evidence of inflation easing alongside a steady labor market.