September 8–12, 2025: Weekly economic update

Macroeconomic Statistics

INFLATION

• Core Consumer Price Index (CPI) (m/m) (August): 0,3% (previous: 0.3%)
• Consumer Price Index (CPI) (m/m) (August): 0.4% (previous: 0.2%)
• Core Consumer Price Index (CPI) (y/y) (August): 3.1% (previous: 2.9%)
• Consumer Price Index (CPI) (y/y) (August): 2.9% (previous: 2.7%)

INFLATION EXPECTATIONS (MICHIGAN)

• 12-month expected inflation (August): 4.8% (prev: 4.8%)
• 5-year expected inflation (August): 3.9% (prev: 3.4%)

PRODUCER PRICE INDEX (PPI):

• PPI (m/m) (August): -0.1%, prev: 0.7%
• 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%): Atlanta Fed GDPNow estimate (Q2): 3.1% (vs. 3.0%). *(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.)

Business Activity Index (PMI)

(Above 50 indicates expansion; below 50 indicates contraction)

• Services sector (August): 54.5 (previous: 55.4)
• Manufacturing sector (July): 53.0 (previous: 53,3)
• S&P Global Composite (August): 54.6 (previous: 55.4)

LABOR MARKET:

• Unemployment rate (August): 4.3% (previous: 4.2%)

• U.S. employment data revision (non-seasonally adjusted): -911K vs. -598K.

• Total number of individuals receiving unemployment benefits: 1.9393K (vs. 1.939K)
• Change in nonfarm payrolls (August): +22K (previously revised: +79K)
• Change in U.S. private nonfarm payrolls (August): +38K (previous: +77K)
• Average hourly earnings (August, y/y): +3.7% (previous: +3.9%)
• JOLTS job openings (August): 7.181M (vs. 7.357M)

MONETARY POLICY

• Federal Funds Effective Rate (EFFR): 4.25% - 4.50% (unchanged)
• Federal Reserve balance sheet increased: $6,605T (vs. previous week: $6,602T)

Following the data release, the 30-day federal funds futures advanced to 95.95, indicating that the market has already fully priced in a 25 basis point increase at the September FOMC meeting.

MARKET FORECAST FOR RATE

Today:

А week earlier:

Commentary

Last week, major equity markets trended higher, supported by macroeconomic data releases and expectations of a potential rate cut.

United States

• The Producer Price Index (PPI), serving as a leading indicator of consumer inflation, showed deflation in August: –0.1% (previous: +0.7%). Core PPI (m/m) also printed at –0.1% (previous: +0.7%). This release set a positive tone early in the week, further reinforced by the CPI report.
• Core CPI remained unchanged, while headline CPI rose by 0.4% m/m and reached 2.9% y/y. Although these figures hardly signal a meaningful disinflation trend, markets interpreted them constructively.
• However, Friday’s data on inflation expectations complicated the picture: 5-year inflation expectations climbed further to 3.9% (vs. 3.4%), while 12-month expectations held steady at 4.8% — still well above the Fed’s target.

Labor market

• A historic revision of U.S. employment data (non-seasonally adjusted) revealed a decline of 911K, with cumulative downward adjustments since February 2022 exceeding 1.1 million jobs.
• This revision fed directly into the unemployment rate, which now stands at 4.3%. While that remains low by historical standards, the trend signals deterioration in labor market conditions.

The Fed faces a particularly complex backdrop: rising inflation expectations juxtaposed with signs of weakening labor demand.

Fed Rhetoric – Still Mixed

Fed Chair Jerome Powell – shift in tone:

• The economy is slowing.
• The changing balance of risks will require a policy adjustment.

Former St. Louis Fed President (and contender for the Fed Chair position):

• The policy rate is currently high; it should be lowered in September.

Cleveland Fed President Loretta Mester:

• The impact of tariffs and trade restrictions on the economy is only now beginning to manifest.
• The core challenge remains inflation, with the trend turning upward again.

FedWatch Market Expectations

• At the upcoming meeting (September 17): the estimated probability of a rate cut stands at 93.4%.
• By year-end: three rate cuts expected.
• Over the next 12 months: six 25 bps cuts priced in, bringing the target range to 2.75–3.00%.

Tariffs

• The U.S. Supreme Court will review the Trump tariffs case, with hearings scheduled for early November.
• Trump is prepared to impose — and is urging the EU to adopt — 50–100% tariffs on China and India, framed as part of broader geopolitical pressure related to the war in Eastern Europe.

Market

By the end of the week, the market posted a median gain of +0.27 percent. The advance was led by the technology sector, basic materials, and communication services, while the weakest performers were consumer staples, consumer discretionary, and healthcare.

Since the beginning of the year (YTD), the market has advanced by +3.89 percent. The strongest performance has come from basic materials, communication services, and utilities, while the weakest sectors have been consumer staples, healthcare, and technology.

SP500

Weekly gain: +1.59% (week closed at 6,584.28). Year-to-date 2025 performance: +11.54%.

NASDAQ100

Weekly performance: +1.86% (week closed at 24,092.19). Year-to-date: +14.07%.

Euro Stoxx 600

Weekly performance: +0.53% (week closed at 554.9). Year-to-date growth: +9.75%.

CSI Index

As of Monday: +1.22% (week closed at 4,521.99). Year-to-date growth: +15.03%.

Hang Seng TECH Index

As of Monday: +5.09% (6,043.61).

BOND MARKET

In the bond market, the week closed with a solid rally, reflected in declining yields. U.S. Treasury Bonds 20+(ETF TLT): weekly performance +1.57% (week closed at 89.95). Year-to-date 2025: +2.45%.

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

• Market yield on 10-year U.S. Treasuries: 4.08% (vs. 4.10%)
• ICE BofA BBB U.S. Corporate Index effective yield: 4.91% (vs. 5.03%)
• 10Y–2Y Treasury spread: 52.0 bps (vs. 57.0 bps)
• 10Y–3M Treasury spread: 5.0 bps (vs. 16.52 bps)

GOLD FUTURES (GC)

Weekly performance: +0.94% (week closed at $3,680.7/oz). Year-to-date growth: +39.37%.

China’s central bank continued to expand its gold holdings in August, with official reserves rising by 60,000 troy ounces, equivalent to an increase of $253.8 billion in dollar terms. Since the beginning of 2024, the bank has boosted its gold reserves nearly eightfold.

DOLLAR INDEX FUTURES (DX)

Weekly performance: -0.47% (week closed at 97.215). Year-to-date 2025: -10.26%.

OIL FUTURES

Weekly performance: -0.45% (week closed at $62.60/bbl). Year-to-date: -12.87%.

The U.S. Energy Information Administration (EIA) in its short-term energy outlook projects a notable decline in global oil prices. Brent crude, which averaged $68 per barrel in August, is expected to fall to around $59 per barrel in the fourth quarter of 2025 and approach $50 per barrel in early 2026. This forecast is driven by a significant build-up in oil inventories as OPEC+ members increase production. According to the EIA, global oil stocks are set to rise by more than 2 million barrels per day on average between the third quarter of 2025 and the first quarter of 2026.

• Global oil demand is projected to rise by 740,000 b/d in 2025, compared with earlier estimates of 680,000 and 700,000 b/d. In 2026, demand is expected to increase by 700,000 b/d, bringing total consumption to 104.4 mb/d.
• Global oil production is forecast to expand by 2.7 mb/d this year to 105.8 mb/d, and by a further 2.1 mb/d next year to 107.9 mb/d, maintaining the outlook for a supply surplus.

BTC FUTURES

Weekly performance: +4.72% (week closed at $116,850). Year-to-date 2025 return: +22.65%.

ETH FUTURES

Weekly performance: +7.98% (week closed at $4,702,5). Year-to-date result: +38.96%.

Cryptocurrency market capitalization: $4 trillion (vs. $3.85 trillion a week earlier) (coinmarketcap.com).

Market share:

• Bitcoin – 57.4% (vs. 57.7%),
• Ethereum – 13.7% (vs. 14.1%),
• others – 29.0% (vs. 28.8%).

Publicly traded companies with a Bitcoin treasury strategy kept their holdings unchanged from the previous week, maintaining 4.66 percent of the total Bitcoin supply on their balance sheets.

The number of companies purchasing Bitcoin continues to grow. Over the past six months, the number of publicly traded firms with Bitcoin holdings has increased from 80 to more than 150, including four constituents of the S&P 500 index.