Date: 29th July 2025.


All Eyes on the US: FOMC, Jobs Report, Earnings and Treasury Supply Dominate a Pivotal Week.



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It’s shaping up to be one of the busiest weeks of the year for US markets, with virtually every major catalyst on the docket. From the FOMC decision and the July employment report to Treasury borrowing forecasts, corporate earnings, and key economic data releases, traders face a flood of information that could significantly sway bonds, equities, and the US dollar.


Yet, with so many variables in play, clarity may remain elusive. The overlapping crosscurrents could result in choppy and indecisive trading as investors attempt to digest the implications for monetary policy, growth, and inflation expectations heading into the final months of 2025.


Fed Expected to Hold Steady, But Watch for Dissent


The Federal Open Market Committee meets Tuesday and Wednesday, and the consensus is firmly aligned around a pause in interest rates. Policymakers have consistently characterised the US economy as resilient and the labour market as solid—two factors that continue to justify patience on rate adjustments.


However, inflation has cooled further in recent months, and concerns over slowing global demand and one-time tariff impacts have emboldened some officials. Notably, Governors Christopher Waller and Michelle Bowman have expressed dovish leanings, calling for a rate cut at this meeting—a position that puts them at odds with the broader committee.


While FOMC dissents from governors are rare, both Waller and Bowman have already defied consensus in recent decisions. Waller previously opposed the decision to slow quantitative tightening, and Bowman dissented in September 2024, favouring a smaller 25 bp cut instead of the 50 bp move that was implemented. If both break ranks again this week, it would mark the first dual governor dissent since 1993, underscoring the growing debate within the Fed.


Chair Powell’s press conference on Wednesday will be closely watched for signals on whether the central bank is preparing to shift its tone ahead of the next meeting in September. Markets are already pricing in a near 50/50 chance of a rate cut that month.


July Jobs Report in Focus as Labour Market Remains Resilient


The July nonfarm payrolls report, due Friday, will be a crucial input into the Fed’s September decision. Expectations point to a 120,000 job increase, a modest gain compared to previous months but still indicative of a labour market that is not deteriorating rapidly.


Private payrolls are projected to rise by 100,000 after a 74,000 gain in June, while factory jobs are expected to hold flat following a 7,000 loss. The unemployment rate is forecast to tick up to 4.2% from 4.1%, as the labour market adjusts to sector-specific layoffs and restructuring—particularly from companies undergoing so-called DOGE cuts, where severance packages have delayed the appearance of actual unemployment.


Wage growth is likely to continue at a moderate pace. Average hourly earnings are projected to rise 0.3% month-over-month, with the annual rate ticking up slightly to 3.8% from 3.7%. The average workweek is expected to remain at 34.2 hours for a second straight month.


With another jobs report due before the September 16–17 FOMC meeting, the Fed will be watching closely to determine whether inflation remains subdued and whether labour market softness justifies a preemptive rate cut to stay ahead of a potential economic slowdown.


Markets Price in Fall Rate Cuts


Despite the expected hold this week, Fed funds futures are leaning toward a September rate cut. The October contract implies roughly 27 basis points of easing, while the December contract reflects nearly 44 bps in total cuts by year-end.


That positioning underscores investor sensitivity to Powell’s tone on Wednesday. Any signs of softening—whether in the statement, the vote tally, or during the press conference—could fuel expectations for more aggressive easing later this year.


Although the Fed has been cautious not to overcommit, the combination of slowing inflation, moderating wage growth, and global uncertainties is making the case for flexibility stronger. Powell may not open the door wide to cuts just yet, but even a small rhetorical shift could move markets.


Other Key Catalysts: GDP, ISM, PCE, and Big Tech Earnings


In addition to the Fed and labour market data, traders must also navigate a wave of critical releases. The second-quarter Advance GDP print, Employment Cost Index (ECI), PCE chain prices, and the ISM manufacturing report all offer insight into the strength of the US economy and inflation dynamics.


Meanwhile, the Treasury Department is set to release Q3 and Q4 borrowing estimates, as well as details of the August refunding schedule—an event that could influence bond yields and market liquidity.


On the corporate front, earnings season continues in full swing, with Apple, Amazon, Meta, and Microsoft among the headline names reporting this week. The results from Big Tech could add volatility, especially if they reveal caution on consumer trends or AI-related capex.


Conclusion: A Pivotal Week for the Fed and Financial Markets


With the FOMC meeting, labour data, inflation indicators, Treasury supply, and earnings all on the calendar, this week could shape market direction for weeks to come. The Fed is expected to hold, but the potential for rare dovish dissents adds an element of intrigue.


As the data rolls, and Powell addresses the press, traders will be seeking any clue on whether a September rate cut is truly on the table. Until then, expect volatility, uncertainty, and plenty of positioning as markets attempt to digest a whirlwind of economic signals.


Always trade with strict risk management. Your capital is the single most important aspect of your trading business.


Please note that times displayed based on local time zone and are from time of writing this report.


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Andria Pichidi
HFMarkets


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