At the very beginning of the year, we discussed factors that would affect the markets and interest rates in 2024. There were plenty of factors to discuss—from economic growth to the progress against inflation. Most of those factors were “up in the air” – for example, we had no idea how long it would take to show progress in the war against inflation. Of course, there were also factors that would pop up during the year – factors which could not be predicted. These factors would include wars, natural disasters and apparently widespread tech outages.

One factor was certain – the Presidential Election taking place in November. Though we can’t predict who will win, we did say that the date is guaranteed and so would be the mudslinging which will take place back and forth. We also can’t predict how the markets will react to one side winning. But we will say that the markets don’t like uncertainty. Already we have had two extraordinary events during this cycle. These included an assassination attempt and the withdrawal of the incumbent candidate. Will there be more surprises? Again, we can’t predict, but it is likely to be a wild ride.

In the more immediate term, this week we will see the release of data shedding light on the inflation picture for July. There will also be a report on retail sales for July. These reports will be scrutinized carefully as the markets are placing bets for an interest rate decrease by the Fed when they meet in September. We have had some good inflation reports lately and the hope is we can continue to make enough progress to make the members of the Fed comfortable taking such an action. Certainly July’s jobs report has put more pressure on the Fed to do so.