The Profit Margin: August 25, 2025
Statistic of the Week
In financial planning, much attention is given to planning for college expenses. However, it is important not to overlook the costs associated with childcare through kindergarten. Arlington, Virginia, stands out as the most expensive county for childcare to the beginning of formal schooling, with a median cost of $146,741. Additionally, numerous counties nationwide reported total childcare expenses for these years exceeding $100,000.
Global Perspective
At the Jackson Hole Economic Policy Symposium, Federal Reserve Chair Powell suggested in his remarks that the FOMC would cut rates at the September meeting. In the speech, Powell noted that the “balance of the risks appears to be shifting,” indicating that the Fed was arguably more concerned about cracks in the labor market than the uptick in inflation.
Market Moving Events
Tuesday: Durable Goods Orders, Consumer Confidence
Thursday: Jobless Claims, GDP (revision)
Friday: Personal Income and Spending, PCE Index, Trade Balance, Consumer Sentiment
Commentary
Markets were volatile last week. Early in the week, equity prices declined due to a report highlighting the lack of corporate ROI on AI investment and speculation about an AI bubble. However, markets surged Friday following remarks by Fed Chair Powell at Jackson Hole. Powell noted, “In the near term, risks to inflation are tilted to the upside, and risks to employment to the downside.”1 Investors are now assigning an 83% chance of a rate cut at the September 17th FOMC meeting and are pricing in five cuts between now and July 2026.2
The DJIA and S&P reached record highs on Friday, finishing the week up 1.53% and 0.27%, respectively.3 The S&P has posted gains in seven of the past nine weeks.4 Conversely, the Nasdaq closed down 0.58% for the week.5 Fixed income yields remained largely unchanged, with the 10-year Treasury yield falling 0.06% to 4.26%.6
It is important to remember that the FOMC’s dual mandate is to maintain price stability and promote full employment. Currently, the central bank appears to prioritize the labor market, viewing the inflationary effects of tariffs as temporary. The upcoming PCE inflation report on Friday will be crucial in assessing how tariffs are impacting consumer prices.
Chart of the Week
The Index of Leading Economic Indicators contracted slightly from June to July, falling 0.1%. The reading was in-line with analyst expectations.
Source Materials
Market Moving Events:
MarketWatch.com
Chart of the Week:
Clearnomics,
The Conference Board
Statistic of the Week:
The Wall Street Journal, The Department of Labor
Global Perspective:
The Wall Street Journal
Commentary:
1. Barron’s
2. Investor’s Business Daily, Barron’s
3. Bloomberg
4. Investor’s Business Daily
5. Bloomberg
6. MarketWatch.com