Federal Reserve Governor Chris Waller indicated in a Reuters interview that the central bank will likely keep interest rates steady as long as inflation progress continues, but a rate hike could return if tariff risks and other factors impede improvement. This morning's data showed initial jobless claims at 206,000 for last week, slightly above the 205,000 forecast, while continuing claims rose to 1.779 million. The U.S. trade deficit for July narrowed to $88.6 billion, better than the expected $90 billion but still the deepest since March 2025's record $133 billion shortfall. Second-quarter non-farm productivity came in at 1.4%, in line with estimates, and unit labor costs rose 1.2%, slightly below the 1.3% forecast. Markets were mixed in pre-market trading, with the Dow up 250 points, the S&P 500 up 10, the Nasdaq down 14, and the Russell 2000 up 7, as investors await Friday's employment report and next week's CPI data.
Automatic Data Processing IncWaller signals steady rates, reducing likelihood of near-term rate cuts, keeping policy rate elevated
Steady rates and potential hike if inflation stalls, supporting higher yields
