The financial markets are experiencing volatility this week, driven by unexpectedly weak U.S. non-farm employment data that has fueled expectations for a Federal Reserve rate cut. Despite market predictions of further rate cuts from the Fed, the U.S. dollar remains surprisingly strong despite these disappointing employment figures. Analysts suggest recent data confirms a rate cut is likely at this month’s meeting, with investor sentiment mirroring this view: the probability of a rate cut at the upcoming Federal Reserve meeting has risen to 99%. Several key economic releases are scheduled throughout the week, including the New York Fed’s one-year inflation expectation on Monday, preliminary non-farm employment benchmarks for 2025 on Tuesday, August’s Producer Price Index (PPI) and wholesale sales data on Wednesday, and August’s Consumer Price Index (CPI) and initial jobless claims for the week ending September 6 on Thursday. Should the PPI show another unexpected surge, investors might temper expectations for a rate cut. However, the impact of tariffs on goods prices appears to be manageable at this point. A more pressing concern for the Federal Reserve is the recent resurgence in service sector inflation, as per Cleveland Fed’s real-time prediction model, the overall CPI annual rate for August is projected to increase slightly by 0.1 percentage points to 2.8%, while the core CPI annual rate is likely to remain unchanged at 3.1%. #PPI