{"id":3341,"date":"2025-09-12T17:42:52","date_gmt":"2025-09-12T17:42:52","guid":{"rendered":"https:\/\/www.rbc.com\/en\/economics\/2025\/09\/12\/us-week-ahead-all-eyes-on-the-fed-for-a-widely-expected-cut-on-wednesday\/"},"modified":"2026-03-31T19:24:09","modified_gmt":"2026-03-31T19:24:09","slug":"us-week-ahead-all-eyes-on-the-fed-for-a-widely-expected-cut-on-wednesday","status":"publish","type":"post","link":"https:\/\/www.rbc.com\/en\/economics\/us-analysis\/us-week-ahead-all-eyes-on-the-fed-for-a-widely-expected-cut-on-wednesday\/","title":{"rendered":"US Week Ahead: All eyes on Fed for widely expected cut"},"content":{"rendered":"\n
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Next week is a big week for markets and economists alike with all of the focus on the highly anticipated Wednesday FOMC meeting. The Fed is expected to return from the sidelines with a 25 basis-point cut in September<\/strong> as the August nonfarm payrolls data pointed to weak job growth after sizeable downward revisions to prior months. <\/p>\n<\/div><\/div>\n<\/div>\n<\/div>\n\n\n\n

At the same time, the uncomfortable reality remains that inflationary pressures are mounting. As we saw this week<\/a>, core services and goods pressures are now building in tandem, and we expect this to continue <\/a>as producers facing tariff costs begin to pass off (at least some of) the burden to consumers. While recent inflation data will not likely be sufficient to keep the Fed in “wait and see” mode this month, our US Rates Strategists Blake Gwinn and Izaac Brook emphasize that the next cutting cycle can be viewed as a resumption of rate “normalization” back towards more \u201cneutral\u201d levels rather than a move into accommodative territory. Of course, the Fed’s path to this perceived neutral could be derailed should inflation concerns begin to trump cyclical weakening of the labor market. Subsequent cuts will continue to be considered on a meeting-by-meeting basis, pending developments in the economic data. <\/p>\n\n\n\n

Retail sales will be the most important economic data point for the week but will pale in comparison to the Fed meeting and is thus likely to take a secondary market focus. We expect August retail sales will post a +0.3% m\/m uptick \u2013 as weaker auto sales volumes weigh on the overall figure. Our forecast calls for the retail sales control group <\/strong>\u2013 which excludes motor vehicles, building materials, gasoline, and food services \u2013 to grow at a slightly stronger clip +0.4% m\/m. We expect upward price pressures in trade-exposed sectors will make grocery sales appear somewhat stronger. <\/p>\n\n\n\n

Zooming out, consumption activity and retail sales in particular have continued to chug along, not accelerating but not meaningfully decelerating either. We see a few factors at play:<\/p>\n\n\n\n