Markets are heading into a week that could redefine the macro backdrop.

The sudden resignation of Fed Governor Adriana Kugler has opened the door for President Trump to nominate an ally, potentially tilting the central bank toward more aggressive easing.

Vice Chair Michelle Bowman is already calling for three cuts this year, citing labor market weakness. But July’s CPI, due Tuesday, could complicate that path if inflation shows a tariff-fueled rebound.

Meanwhile, the clock is running on the China tariff truce, and seasonal headwinds for stocks are in play.

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The Big Picture

Global Trade

From Apple to McDonald’s, U.S. Brands Risk Losing Ground in One of Their Biggest Markets

A wave of boycott calls in India targeting major U.S. brands, including McDonald’s, Coca-Cola, Amazon, and Apple, is highlighting the economic risks facing American companies amid escalating trade tensions.

The movement follows Washington’s decision to impose a 50% tariff on Indian imports, one of the steepest in the region.

India’s importance to U.S. corporations extends far beyond product sales.

It serves as a critical growth market, a hub for cost-efficient talent, and a base for technology, logistics, and customer service operations.

Companies like Meta, Domino’s, Starbucks, and Apple have built deep consumer penetration, while tech giants rely on India’s vast IT workforce to serve global markets.

If anti-U.S. sentiment translates into lasting consumer boycotts, the impact could ripple back to American headquarters through lost revenue, supply chain disruption, and reduced market confidence.

Given India’s scale as the world’s most populous nation, even a partial pullback in consumer engagement could challenge global earnings projections.

Trade tensions risk turning into non-tariff barriers, where public sentiment replaces formal policy as a barrier to market access.

For U.S. policymakers, the episode highlights that tariff strategies abroad can quickly become economic headwinds at home.

Supply

U.S. Beef Supply Faces Tightest Squeeze in Decades as Multiple Pressures Converge 

The U.S. beef industry is facing one of its most constrained supply environments in more than 70 years, with implications that extend from grocery shelves to global trade flows.

Cattle numbers have been declining for two decades, and the national herd now sits at its lowest level since 1951.

Years of drought, rising feed costs, and herd reductions have compounded the challenge, leaving ranchers with limited capacity to rebuild stock quickly.

Extreme weather patterns have dried out pastures, forcing many producers to reduce breeding herds, a decision that will continue to impact supply for years to come.

Biosecurity concerns have further strained availability.

The spread of the New World screwworm parasite from Mexico triggered federal restrictions on cattle imports earlier this year, sharply reducing cross-border livestock flows.

With domestic feedlots already short on supply, operators are competing more aggressively for available cattle. The squeeze is occurring as U.S. policy adds new uncertainties to the market.

While tariffs have yet to be the primary driver of beef scarcity, proposed and existing trade measures targeting key cattle suppliers, including Canada, Mexico, and Australia, could exacerbate the supply crunch if implemented on a large scale.

For the U.S. beef sector, the convergence of environmental, biological, and trade pressures underscores the vulnerability of a supply chain central to the nation’s agricultural economy.

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Trade & Technology

U.S. Chip Strategy Faces Crossroads as New Licensing Rules Redefine Global Market Access 

The United States is entering a pivotal phase in its semiconductor policy, with sweeping implications for domestic manufacturing, global supply chains, and national security.

Recent licensing arrangements between Washington and major chipmakers mark a shift in how the government balances market access with strategic oversight.

Under newly structured export rules, select U.S. companies have secured conditional access to overseas markets in exchange for direct payments tied to foreign sales.

While these measures aim to preserve national security safeguards, they also highlight the growing role of Washington as an active participant in the commercial terms of high-tech trade.

For the U.S. economy, semiconductors remain a central pillar. They underpin AI infrastructure, advanced manufacturing, defense systems, and everyday consumer electronics.

The new policy approach could funnel a significant amount of revenue back into U.S. coffers.

Still, it also raises questions about competitiveness, compliance complexity, and the long-term positioning of American firms in the global chip race.

The broader macro impact will be shaped by how these rules intersect with ongoing efforts to onshore production.

Massive investment pledges from U.S.-based and foreign chipmakers to build facilities domestically underscore a push for supply chain resilience.

At the same time, global partners and competitors are recalibrating, setting the stage for a more fragmented, strategically driven semiconductor market.

Metrics to Watch

• Consumer Price Index in Focus: Economists expect July CPI to rise 2.8% year-over-year. Any upside surprise could force markets to temper rate-cut expectations, especially with tariff costs potentially bleeding into consumer prices.
  

• Initial Jobless Claims Coming: Claims are forecast to edge up to 221,000. After July’s weak payrolls print and downward revisions to prior months, this data will help gauge whether labor softening is accelerating.
  

• Productivity & Labor Costs Trending: Q2 productivity is projected to rebound to 1.9% from -1.5%, while unit labor costs are expected to drop to 1.3% from 6.6%. The Fed will be watching for signs that wage-driven inflation pressures are easing.

• Consumer Credit on Watch:
  June’s numbers will reveal how much households are leaning on debt to maintain spending as savings fall and borrowing costs remain elevated.

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Market Movers

🪑 Fed Shake-Up Could Tilt Toward Faster Cuts
Adriana Kugler’s surprise resignation gives President Trump a fresh opening to reshape the Fed ahead of the September meeting.

His nominee, Stephen Miran, has echoed calls for lower rates, joining voices like Bowman’s in favor of faster easing, potentially shifting the policy balance just as inflation and labor signals diverge.

💹 CPI Looms Over Record-High Stocks
The S&P 500 is up more than 8% year-to-date and hovers near all-time highs, but Tuesday’s CPI could be the volatility trigger.

A hotter reading risks derailing rate-cut momentum, while in-line data could keep the rally intact heading into a seasonally weak stretch.

🌐 China Tariff Truce Nears Deadline
Tuesday also marks the expiration of the U.S.-China tariff pause.

Without an extension, duties could jump to 80%–85% on Chinese imports, raising fresh supply chain risks and potential inflation spillovers.

🇬🇧 Bank of England Cuts but Moves Cautiously
In a tight 5–4 vote, the BOE lowered its key rate to 4%, balancing sticky inflation against softening jobs data.

Governor Andrew Bailey emphasized a gradual approach, signaling further cuts will require clearer disinflation trends.

Market Impacts

Equities: U.S. stock futures edged higher Sunday night, with the Dow up 56 points and S&P 500 and Nasdaq 100 futures each gaining 0.1%, putting major indexes within striking distance of record highs.

The Nasdaq closed last week at fresh peaks, and Apple’s recent rally has helped broaden the advance.

Still, traders are wary of stretched valuations, seasonal weakness, and tariff fallout, particularly with CPI and PPI data due this week.

Nvidia and AMD made headlines after agreeing to share 15% of certain China chip revenues with the U.S. government in exchange for export licenses, while also pushing back on Chinese accusations about security risks in their AI chips.

CPI remains the key hurdle—hotter inflation could upend rate-cut expectations heading into the Fed’s September meeting.

Bonds: Treasury yields climbed as traders weighed incoming inflation data against an evolving Fed backdrop.

The 10-year yield rose to 4.285% and the 30-year hit 4.852% after higher tariffs on key trade partners stoked concerns about sticky prices.

President Trump’s nomination of Stephen Miran to the Fed Board has fueled expectations of a more dovish tilt, especially as speculation builds over a potential “shadow chair” ahead of Jerome Powell’s term end.

Bond desks are watching whether CPI and PPI confirm price pressures that could slow the pace of easing.

Currencies: The dollar index rose 0.21% to 98.19 on Friday but is still tracking a weekly loss of around 0.5% as traders price in up to 58 basis points of Fed cuts by year-end.

The greenback strengthened against the yen to 147.71 but lost ground earlier in the week to the euro and sterling on dovish policy expectations.

Currency markets are also eyeing the potential expiration of the U.S.-China tariff truce, developments in U.S.-Russia peace talks, and whether Trump’s Fed picks accelerate rate cuts.

Commodities: Gold hit a record high of $3,491.30 before retreating to $3,463.30 after the White House promised to clarify “misinformation” over tariffs on 1-kg and 100-oz gold bars.

The Swiss Precious Metals Association warned the measures could disrupt global gold flows.

Oil prices held steady on Friday. Brent closed at $66.59, and WTI at $63.88, but both posted their steepest weekly losses since late June.

Supply pressures from OPEC+ production hikes and concerns over tariff-hit demand weighed on sentiment, while reports of a potential Trump–Putin summit over Ukraine added headline volatility.

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Key Indicators to Watch

📅 Consumer Price Index – Tuesday, Aug. 12
July CPI is expected to rise 0.2% month-over-month and 2.8% year-over-year, with core CPI seen at 0.3% and 3.1%, respectively. Any upside surprise could challenge rate-cut expectations for September.

📅 Initial Jobless Claims – Thursday, Aug. 14
Claims are forecast to rise to 229,000 from 226,000. This update will help gauge whether the labor market is continuing to soften after July’s disappointing payrolls report.

📅 Producer Price Index – Thursday, Aug. 14
PPI is expected to increase 0.2% month-over-month in July, with core PPI also up 0.3%. Stronger-than-expected figures could signal that pipeline inflation pressures remain elevated.

📅 Retail Sales – Friday, Aug. 15
Economists see July retail sales rising 0.5%, with the ex-autos measure up 0.3%. This will provide a read on consumer resilience in the face of higher borrowing costs and fading savings.

Everything Else

• Trump’s reciprocal tariffs take effect, hitting dozens of U.S. trade partners with duties up to 50%.

• Jobless claims edge higher, but “no hire, no fire” trend keeps layoffs in check.

• Swiss tariffs set to raise prices for chocolate, watches, and skincare in the U.S.

• Canada loses tens of thousands of jobs as tariffs dent hiring plans.

• China’s factory-gate prices fall again, deepening deflation concerns.