Market News

• Interest rates are not restraining the US economy
• Midterms won't affect Fed's October decision
• I don't see Fed's credibility as damaged in recent weeks
• I would probably have supported rate hike at July meeting
• Unclear what policy setting is restricting right now
• Energy shock is leaking into economy
• The Fed needs to get to 2% inflation
• There may be room to have fewer FOMC meetings

Kansas City Fed President Jeffrey Schmid maintained his hawkish stance arguing that current interest rates are not restraining economic activity and reiterating Fed's goal of returning inflation to the 2% target. 

He also noted that it's unclear what interest rate setting is need to restrain the economy enough to bring inflation back to target. He added that he would…

Headlines:

• Gold bulls on edge ahead of Fed Chair Warsh speech at Jackson Hole
• US futures hold higher, bolstered by Nvidia earnings
• Policymakers concluded that risks to the inflation outlook are tilted to the upside - ECB accounts
• ECB's Radev says October and December meetings remain 'live', policy to be guided by economic data
• BOJ policymaker Himino says won't comment on market expectations on rate hike
• Will Warsh play it cool and let Bessent take the wheel for now?
• US administration reportedly mulling over fresh round of tariffs on semiconductors
• Germany consumer sentiment set to improve further going into September

Markets:

• AUD leads, GBP lags on the day
• European equities mostly lower; S&P 500 futures up 0.4%
• US 10-year yields down 0.5 bps to…

Nvidia delivered another strong beat-and-raise quarter, fueled by accelerating demand for AI infrastructure. By now, most traders know the headline numbers:

• Revenue: $96.22 billion versus $92.17 billion expected, up 106% year over year and 18% from the prior quarter.

• Adjusted EPS: $2.22 versus $2.10 expected.

• Data-center revenue: $89.0 billion versus $85.08 billion expected, up 117% year over year.

• Q3 revenue guidance: $108 billion, plus or minus 2%, comfortably above the $104.19 billion estimate.

• Nvidia projected approximately 70% revenue growth for fiscal 2028, well above analysts’ prior expectations of around 44%.

• Nvidia and AWS plan to deploy an additional 2 million GPUs during 2027 and 2028.

• The Vera Rubin platform has begun shipping and is…

• Prior month wholesale inventories 0.3%
• Whole inventories advanced for July 1.3% versus 0.2% expected.
• Retail inventories advanced for July 0.7% versus -0.5%

The USD is little changed and mixed as North American traders enter for the day. The greenback is trading lower against the AUD and NZD, higher against the EUR, JPY, GBP and CHF, and nearly unchanged against the CAD.

The major currency pairs remain confined to relatively narrow trading ranges. In the morning Kickstart video, I take a technical look at the EURUSD, USDJPY and GBPUSD and outline the key levels that will define the bias for each pair. What would give the buyers more control? What would shift the advantage toward the sellers? What are the risks and targets that traders should be watching?

The goal is to identify the levels that could unlock the next move and provide a roadmap for the North American session. Be aware. Be…

• Politlcal pressure on the Fed 'puts me on edge'
• Current low hire, low fire economy is unusual
• Economy on balance has been stable
• Political interference in central banks generally leads to inflation

Goolsbee has been advocating for rate hikes for awhile.

• Prior was -101.5 billion

• Prior week Initial claim 206K revised to 207K
• Initial jobless claims 203K vs 206K estimate
• 4 week moving average of initial claims 205.5K-vs 204K last week
• Prior week continuiing claims 1.799M
• Continuing claims for the current week 1.778M vs 1.790M last week
• 4-week MA of continuting claims 

• Priorw as -7.18B (revised to -8.31B)

That's a tailwind for GDP.

• Inflation expectations currently remained well anchored for the medium-term
• But high short-term inflation expectations had continued to persist since the outbreak of the war
• Against this background, members concluded that the risks to the inflation outlook were to the upside
• The longer energy prices stayed high, the more likely they were to drive up broader inflation through indirect and second-round effects
• Members widely agreed that the incoming information had been broadly consistent with the baseline in the June projections
• Members took comfort from the fact that most survey and market-based inflation expectations had remained well anchored
• Inflation outlook remained vulnerable to renewed shocks and that the risks surrounding the inflation…

FUNDAMENTAL OVERVIEW

The bullish momentum in silver has waned in recent days, likely due to some profit-taking ahead of the Jackson Hole event. After the Treasury buyback announcement and Bessent’s “verbal” intervention to suppress long-term yields, traders will be eager to see whether Fed Chair Warsh leans against the easing in financial conditions.

If he doesn’t, silver will likely get another boost from further easing in financial conditions and the dovish repricing in near-term interest rate expectations. On the other hand, if he pushes back saying things like "recent easing in financial conditions, if sustained, could complicate the process of returning inflation to our…

Singapore will start paying almost $55,000 for each child to boost its birth rate after the fertility rate fell to a record low of 0.87 children per woman last year.

And it isn’t the only country trying to tackle the problem with money.

Australia pays up to $2,834 for the first child and $1,418 for subsequent children. China provides 3,600 yuan a year for each child under three, around $535 a year, and up to $1,605 over three years. Japan’s public health insurance system pays 500,000 yen, around $3,400, for each child at birth. And the list goes on.

Yet low birth rates remain a problem, with more than half of the world’s countries below the replacement level of 2.1…