August 25–29, 2025: Weekly economic update

Macroeconomic Statistics

INFLATION

• Core Consumer Price Index (CPI) (m/m) (June): 0,3% (previous: 0.2%)
• Consumer Price Index (CPI) (m/m) (June): 0.2% (previous: 0.3%)
• Core Consumer Price Index (CPI) (y/y) (June): 3.1% (previous: 2.9%)
• Consumer Price Index (CPI) (y/y) (June): 2.7% (previous: 2.7%)

INFLATION EXPECTATIONS (MICHIGAN)

• 12-month expected inflation (May): 4.8% (prev: 4.9%)
• 5-year expected inflation (April): 3.5% (prev: 3.4%)

PRODUCER PRICE INDEX (PPI):

• PPI (m/m) (August): 0.9%, prev: 0.0%
• Core PPI (m/m) (August): 0.9%, prev: 0.0%

GDP (U.S. Bureau of Economic Analysis, BEA) (Q2 2025, annualized, second estimate): +3.30% (advance estimate: 3.0%; Q1 2024: –0.5%):

The increase in real GDP in the second quarter was driven primarily by a decline in imports, which are subtracted in the GDP calculation, and by stronger consumer spending. These gains were partially offset by a reduction in investment and exports.

Atlanta Fed GDPNow Indicator (Q2): 3.5% (vs. 2.2%).

*(The GDPNow forecasting model provides a “real-time” estimate of official GDP growth ahead of its release, using a methodology similar to that employed by the U.S. Bureau of Economic Analysis.)

PCE (the Federal Reserve’s preferred inflation gauge):

• Core Personal Consumption Expenditures (PCE) Price Index (m/m, July): +0.3% (vs. 0.3%)
• PCE Price Index (m/m, July): +0.2% (vs. 0.3%)
• Core PCE Price Index (y/y, July): +2.9% (vs. 2.8%)
• PCE Price Index (y/y, July): +2.6% (vs. 2.6%)

U.S. GDP Deflator (q/q): 2.0% (vs. 3.8%)

The GDP Deflator — the GDP price index — measures the annual change in prices of goods and services included in GDP.

Business Activity Index (PMI):

(Above 50 indicates expansion; below 50 indicates contraction)

• Services sector (July): 55.4 (previous: 55.7)
• Manufacturing sector (July): 53.3 (previous: 49,8)
• S&P Global Composite (July): 55.4 (previous: 55.1)

LABOR MARKET:

• Unemployment rate (June): 4.2% (previous: 4.1%)
• Nonfarm payroll employment change (June): 73K (previous: 144K revised)
• Change in US private nonfarm payrolls (June): 83K (prev: 137K)
• Average hourly earnings (June, y/y): 3.9% (previous: 3.8%)
• JOLTS job openings (May): 7.769M (vs. 7.395M)

MONETARY POLICY

• Federal Funds Effective Rate (EFFR): 4.25% - 4.50% (unchanged)
• Federal Reserve balance sheet increased: $6,603T (vs. previous week: $6,18T)

MARKET FORECAST FOR RATE

Today

А week earlier:

Commentary

Key takeaways from the ECB Monetary Policy Meeting Minutes:

• Inflation dynamics: Inflation stands at the Governing Council’s medium-term target of 2%. In June, it rose from 1.9% in May to 2.0%, mainly due to a rebound in energy inflation from –3.6% to –2.6%. Food price inflation eased slightly from 3.2% to 3.1%. Core inflation (HICP excluding energy and food) remained unchanged at 2.3% in June. Based on recent energy futures prices, headline inflation is expected to remain at its current level throughout the remainder of 2025, before bottoming out at around 1.5% in the first quarter of 2026. Most measures of long-term inflation expectations remain anchored at around 2%.
• Global PMI: The global composite Purchasing Managers’ Index (PMI), excluding the euro area, fell on average in the second quarter to 51.4 from 52.0 in the first quarter, reflecting a slowdown in both manufacturing and services.
• Euro area resilience: Supported in part by previous Governing Council rate cuts, the euro area economy has shown resilience in a challenging global environment. In Q1 2025, growth exceeded expectations, driven by a surge in exports ahead of anticipated tariff increases, particularly in the Irish pharmaceutical sector. Private consumption and investment also made positive contributions, while inventories weighed negatively.
• Labour market: The unemployment rate remained broadly unchanged over the past year, standing at 6.3% in May. Employment grew by 0.2% in Q1 compared with 0.1% in Q4 2024. As real GDP growth outpaced employment growth, labour productivity increased both per hour and per worker.
• Risks: Downside risks to economic growth persist. Key risks include a further escalation of global trade tensions and the related uncertainty, which could dampen exports and lead to a decline in investment and consumption.

The second release of U.S. GDP figures showed an upward revision, with the second estimate coming in at +3.30% (advance estimate: 3.0%; Q1 2024: –0.5%).

Markets were awaiting consumer spending (PCE) data, which showed no increase in monthly growth rates. Year-over-year, the PCE index remained unchanged at 2.6%, while core PCE ticked up by 0.1 percentage points to 2.9%. These numbers are not alarming at this stage, leaving the overall inflation picture mixed.

The U.S. GDP deflator points to easing inflationary pressures (q/q: 2.0% vs. 3.8%). However, expectations remain well above target: 12-month forward inflation stands at 4.8%, while the 5-year inflation expectation (August) is at 3.5%.

At the latest meeting, Chair Powell signaled that the Fed intends to pursue a proactive monetary policy stance in the face of inflation. Meanwhile, the increase in jobless claims has slowed, and the labor market appears less concerning. Overall, the balance of risks for the Fed remains tilted toward inflation.

Markets reacted to the macro data with a modest decline.

Trump dismissed Federal Reserve Governor Lisa Cook over allegations of mortgage fraud. In response, Cook filed a lawsuit challenging the decision. Trump has nominated Judy Shelton to the Fed Board, with confirmation hearings scheduled for September 4.

Meanwhile, Fed Governor Christopher Waller expressed support for a 25-basis-point rate cut at the September FOMC meeting. Market expectations according to FedWatch:

• Next meeting (September 17): estimated probability of a rate cut stands at 87.6%
• Next 12 months: five 25-basis-point cuts expected, bringing the target range to 3.00–3.25%
• By year-end: two cuts remain priced in.

Visualization of Trump’s tariffs:

Latest developments:

• U.S. tariffs on India: The United States is imposing 50% tariffs on India, excluding electronics and pharmaceuticals. If sustained, these tariffs could slow India’s economy, which currently records the strongest growth among EM peers at 7.4%.
• China and rare earths: Trump declared that China must ensure the supply of rare earth magnets or face 200% tariffs.
• EU proposal: The European Union is set to propose eliminating all tariffs on U.S. industrial goods this week to meet Trump’s demands and reduce tariffs on car exports from the bloc. The Commission also intends to introduce preferential rates on seafood and agricultural products. Current tariffs on EU cars exported to the U.S. stand at 27.5%, which would drop to 15%—but only after legislation eliminating industrial tariffs is enacted.
• Corporate outlook: Walmart’s CEO stated that tariff-related costs are expected to increase in Q3 and Q4.

Market

For the week, the median decline stood at +0.14%. Leading sectors: energy, basic materials, and real estate.

YTD (Year-to-Date): +2.73%. Leading sectors remain utilities, basic materials, and communication services. Laggards are technology (–5.97%) and healthcare (–9.97%).

SP500

The S&P 500 Index climbed to a new all-time high of 6,508 on Thursday, before ending the week down 0.1% at 6,460.20. Year-to-date 2025 performance: +9.44%.

NASDAQ100

The Nasdaq 100 ended the week down –0.35%, closing at 23,415.42. Year-to-date performance: +10.87%.

NVDA

In Q2, sales rose 56% to $46.7 billion, though this marked the slowest growth pace in two years. Net income came in at $1.05 per share (vs. forecast of $1.01). The data center segment generated $41.1 billion, while gaming revenue reached $4.29 billion, both exceeding expectations.

Nvidia issued a cautious outlook for Q3, guiding for $54 billion in revenue, below the more optimistic forecasts of $60 billion. Following the report, the stock fell 4.5%.

Comments from Nvidia CEO Jensen Huang:

• Weakness in China remains the key risk: the H20 chip is not yet available, costing the company around $4 billion in lost revenue.
• The Q3 outlook does not include H20.
• U.S. export restrictions and the planned 15% revenue clawback from China could significantly impact sales (Nvidia and AMD agreed to remit 15% of AI chip revenue in China to the U.S. government to secure export licenses).
• Huang emphasized that “by the end of the decade, $3–4 trillion will be spent on AI infrastructure,” while also stressing the potential of the Chinese market if trade barriers are lifted.

The company approved a new $60 billion share buyback program. Annual revenue could reach $200 billion, and surpass $300 billion by 2028, potentially accounting for one-third of the global semiconductor industry.

Euro Stoxx 600

Ended the week down –2.01%, closing at 551.2. Year-to-date performance: +9.02%.

CSI Index: +1.22% to 4,523.71. Year-to-date performance: +15.08%.

Hang Seng TECH Index (HSTECH.HK): –1.45% on Monday, closing at 5,798.96. Year-to-date performance: +30.70%.

BOND MARKET

Bond Market ended the week with neutral dynamics. U.S. Treasury Bonds 20+ (ETF TLT): weekly performance –0.52%, closing at 86.6. Year-to-date 2025: –1.37%.

U.S. 2-Year Treasury Note Auction: 3.641%. The U.S. Treasury is issuing new debt at a lower rate.

YIELDS AND SPREADS 2025/08/25 vs 2025/08/18

• Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity: 4.24% (vs. 4.273%)
• ICE BofA BBB U.S. Corporate Index Effective Yield: 5.06% (vs. 5.17%)
• Yield spread (10Y vs. 2Y U.S. Treasuries): 62.0 bps (vs. 55.0 bps)
• Yield spread (10Y vs. 3M U.S. Treasuries): 9.0 bps (vs. 4.6 bps)

GOLD FUTURES (GC)

For the week: +2.89%, closing at $3,516.1/oz. Year-to-date growth: +33.14%. Today, futures reached a new all-time high of $3,557/oz.

DOLLAR INDEX FUTURES (DX)

For the week: +0.18%, closing at 97.780. Year-to-date 2025: –9.74%.

OIL FUTURES

For the week: +0.38%, closing at $64.01/barrel. Year-to-date: –10.91%.

BTC FUTURES

For the week: –4.64%, closing at $108,420. Year-to-date return: +13.80%.

ETH FUTURES

For the week: –1.61%, closing at $4,397.3. Year-to-date performance: +11.86%.

Cryptocurrency Market Overview

On July 18, 2025, U.S. President Donald Trump signed the GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins), marking the country’s first comprehensive federal legislation regulating the issuance and circulation of stablecoins. The law aims to establish a structured and secure ecosystem for digital assets, imposing requirements on issuers such as 100% backing with liquid reserves, strict anti–money laundering compliance, and mandatory licensing from financial regulators.

For the first time, the Act provides regulatory clarity for both stablecoins and tokenized assets (RWA). Under the new framework, stablecoins are officially recognized as smart contracts, operating primarily within the Ethereum ecosystem. This means that every new dollar tokenized into USDC, USDT, or other stablecoins requires Ethereum’s network resources—gas fees for transactions and smart contract space.

Currently, over 54% of all stablecoins circulate on Ethereum, positioning it as the core infrastructure asset for the future of digital money.

Following the adoption of the GENIUS Act, major funds and banks have started accumulating ETH, both as a hedge and as a strategic long-term asset. According to CoinTelegraph and MarketWatch, forecasts see ETH rising to $6,000–$7,000 by year-end (not investment advice).

Market reaction: Net inflows into Ethereum ETFs have reached record highs.

Charts show that July and August were the strongest months for capital inflows into ETH to date:

In August, Bitcoin saw outflows of –$737 million, while Ethereum recorded inflows of +$4 billion.

On the left (below): Stablecoin distribution by blockchain — Ethereum holds 54% of the market, followed by Tron with a 36% share.

On the right: Growth in TVL (Total Value Locked) — the volume of capital actively deployed within blockchains.

• According to DeFiLlama (August 2025):
• Ethereum TVL grew in 2025 from $45 billion to $91.31 billion (vs. $4.04 billion year earlier).
• Solana (SOL): $11.78 billion (vs. $6.22 billion).
• Tron (TRX): $6.077 billion (vs. $4.63 billion).

Cryptocurrency Market Capitalization: $3.77 trillion (vs. $3.86 trillion a week earlier) (coinmarketcap.com).

• Bitcoin dominance: 57.4% (prev. 57.5%)
• Ethereum dominance: 14.1% (prev. 14.3%)
• Others: 28.5% (prev. 28.2%)

Public companies with Bitcoin Treasury strategies:

The share of bitcoins held on corporate balance sheets amounts to 4.66% of total Bitcoin supply.

Crypto Market News

• U.S. GDP data on blockchain: The U.S. Department of Commerce has, for the first time, published official GDP data on blockchain. The statistics are available across nine networks: Bitcoin, Ethereum, Solana, TRON, Stellar, Avalanche, Arbitrum One, Polygon, and Optimism. Data verification and distribution are powered by Chainlink and Pyth oracles, with support from major exchanges including Coinbase, Gemini, and Kraken.
• Kraken–SEC talks on tokenization: Crypto exchange Kraken met with SEC representatives to discuss tokenization initiatives, following the regulator’s earlier rejection of Binance’s tokenization project.
• JPMorgan on Bitcoin: JPMorgan noted that Bitcoin volatility has fallen to a historic low, and the cryptocurrency is currently undervalued relative to gold.