Markets recalibrated to growing expectations that Federal Reserve policymakers may cut rates in the fall, after Chair Jay Powell used his speech in Jackson Hole to underscore headwinds facing jobs growth. In his address last Friday, Powell highlighted that tariffs’ impact on inflation could prove to be “relatively short lived,” while “downside risks to employment are rising” amid a slowdown in both supply and demand in the labor market. The speech paved the way for officials to ease borrowing costs in September to bolster consumer spending, business investment, and the housing market amid an evolving outlook.

Investors digested potential developments on the tariff front this week, as President Donald Trump raised the prospect of imposing additional levies on countries that attempt to tax or regulate US tech companies. Meanwhile, the US economy grew 3.3% in the second quarter, stronger than an initial estimate of 3%, the Commerce Department said on Thursday. The personal consumption expenditures (PCE) report on Friday will provide an update on consumer spending and inflation trends. Core PCE inflation, a key metric for the Fed, is forecast to have inched higher to 2.9% year-over-year in July from 2.8% a month earlier, according to estimates compiled by Dow Jones.

PGIM recently gathered a panel of experts to dissect the macro environment, the shifting policy landscape, and where selective conviction might be starting to reemerge in a post-consensus world.