As we move into August and the remainder of 2024, economic data suggests a compelling case for rate cuts. Recent reports indicate a cooling labor market, with downward revisions to nonfarm payrolls and an uptick in the unemployment rate. Inflation metrics, particularly the CPI and PCE, show promising signs of deceleration, with core CPI hitting its lowest monthly increase in years. Housing inflation has also eased significantly. Despite these positive trends, the Fed remains cautious, awaiting further confirmation before implementing rate cuts.

Market expectations lean towards potential rate reductions starting in September, contingent on continued favorable economic data.