The unofficial end to the summer marks the beginning of a pivotal juncture for financial markets with key policy decisions and economic data shaping the investment outlook. A holiday-shortened week in the US began with volatility across equities and government debt, alongside fresh all-time highs for gold prices, amid renewed uncertainty over the future of America’s tariffs—and what it could mean for monetary policy and the nation’s balance sheet. A federal appeals court ruled against the Trump administration’s reciprocal trade duties last Friday but allowed the tariffs to remain in effect until mid-October. The government filed an appeal with the Supreme Court on Wednesday. On Capitol Hill, negotiations over the federal discretionary budget are set to heat up with Congress facing a deadline at the end of September to avoid a partial government shutdown. In the UK, fiscal jitters pushed up the yield on 30-year gilts to its highest level since 1998 on Tuesday.

Trade policy will help set the direction for interest rates, as the Federal Reserve remains on alert for potential ripple effects impacting the labor market and inflation. A Labor Department report on Wednesday revealed that the number of job openings fell in July. Hiring in the private sector appeared to decelerate with job gains slowing to 54,000 last month from 106,000 in July, according to ADP data on Thursday. The Labor Department will publish its August jobs data on Friday. Fed Governor Christopher Waller cited concerns over a softer labor market when he told CNBC on Wednesday that policymakers should cut rates when they meet in less than two weeks.

PGIM’s Tom Porcelli hosts a discussion about monetary policy and central bank independence with Daleep Singh and Katharine Neiss in this episode of All the Credit.