Three market events to watch
 

I monitor the events that drive prices and influence sentiment. Three items sit at the top of my screen: Chair Jerome Powell’s economic outlook, fresh housing data, and the PCE inflation report. Each one can shift interest rate expectations. Taken together, they can tilt stocks, bonds, and housing by week’s end.

“Jerome delivers his economic outlook speech on Tuesday. It is always market moving.”

Why Powell’s Speech Matters

The Federal Reserve sets policy, but the chair sets the tone. Powell’s words influence expectations for rate moves, the balance sheet, and how long policy stays tight. Markets react not only to what he says but to how he says it. A few lines can significantly impact yields within minutes.

Traders will listen for signals on three themes. First, growth. Is the Fed seeing resilience, or signs of cooling? Second, inflation. Are price pressures easing fast enough to justify rate cuts soon, or is the path slower? Third, financial conditions. If credit has already tightened, the Fed may feel less pressure to keep policy restrictive.

I’ll watch for any change in the “higher for longer” stance. If Powell hints that inflation progress is sticking, the odds of a rate cut early next year could rise. That would likely help long-duration assets such as growth stocks and investment-grade bonds. A firmer tone on inflation would have the opposite effect.

His Q&A, if there is one, often holds the tell. Prepared remarks are vetted. Off-the-cuff answers can reveal how the Fed views fresh data or risks. If Powell mentions wage growth, oil prices, or the job market in detail, that will be the part to replay.

Housing Data And Mortgage Rates

Housing has been one of the most interest–rate–sensitive parts of the economy. Mortgage rates climbed to multi-decade highs this year. That froze supply, stalled demand, and cooled price gains in many regions. Now rates have eased from the peak. The question is whether that relief is enough to thaw activity.

“Mortgage rates are finally easing. So did the frozen housing market thaw at all in August?

Two reports will give us clues. New home sales arrive on Wednesday. Existing home sales follow on Thursday. New homes respond more quickly to rate changes because builders can adjust incentives and inventory levels. Existing homes depend on owners’ willingness to list. With many owners locked into low-rate mortgages, the supply has remained tight. That has supported prices even as sales slowed.

Builders have been buying down mortgage rates to drive traffic. If that tactic pulled buyers off the sidelines, new home sales should improve. If not, it may mean affordability is still too stretched. For existing homes, I will watch the month-over-month sales pace and the inventory trend. Rising listings would be a healthy sign for a more balanced market.

Beyond the headline numbers, the regional mix matters. The South and West hold a heavyweight in new home construction. Weather can distort monthly figures. One month does not make a trend, so I compare three-month averages. I also track median price changes and days on market. If the median holds or rises while supply grows, demand is firming.

Housing’s link to the broader economy is deep. Sales drive furniture, appliances, and home improvement. Construction supports jobs and wages. A mild revival would argue for steady growth. A further slump would raise the odds of a slower second half.
 

PCE Inflation And The Fed Path

Friday’s PCE inflation report is the capstone. The Fed refers to it as the preferred gauge because it encompasses a broad range of consumer prices and accurately reflects shifts in spending. The core measure, which strips out food and energy, tends to guide policy. Fresh readings will shape how markets price the next few Fed moves.

“On Friday, the Fed’s favorite inflation measurement drops.”

What am I watching? Three things. First, the month-over-month core change. Small monthly gains suggest progress. A hot print suggests stickiness. Second, the three- and six-month annualized pace. These help show the short-run trend. Third, services inflation excluding housing. That bucket has been the sticky part. If it cools, cuts draw closer. If it stays hot, patience extends.

Energy prices can swing the headline reading. That can still matter for consumer sentiment and spending. But for policy, the core is the guide. Bond yields usually respond within minutes of the release. Stocks follow. If the report confirms cooling, markets often price lower rates sooner. If not, the “wait and see” approach stays in place.
 

What It Could Mean For Markets

We could see a clean, consistent message across the week. Or we could get mixed signals. Here are the broad scenarios and how they may play out across assets:

• Dovish tilt: Powell sounds confident on inflation progress, housing stabilizes, and PCE cools. Long-term Treasury yields fall. Growth stocks outperform. Credit spreads narrow.
• Hawkish tilt: Powell stresses inflation risk, housing softens, and PCE runs hot. Yields rise. Value and energy hold better. Long-duration assets lag.
• Mixed: Powell is cautious, housing shows pockets of strength, and PCE is near forecasts. Markets chop sideways while awaiting the next catalyst.

Volatility can rise around these releases. Options markets often price larger moves early in the week. Short-term pullbacks and quick rebounds are common. That calls for a plan, not guesswork. Reacting to every headline invites mistakes.
 

How I Am Preparing

I focus on process. No single data point should overturn a long-term plan. That said, I prepare for near-term swings. Here is how I approach weeks like this:

• Review rate sensitivity across the portfolio. I map which holdings gain if yields fall and which hold up if yields rise.
• Check cash needs and liquidity. I keep short-term cash needs in low-volatility vehicles so market swings do not affect bills or payroll.
• Set alerts for key levels. For example, 10-year Treasury yield thresholds, the dollar index, and sector ETFs around support and resistance.
• Avoid forced trades. I use limit orders, not market orders, during event windows to manage execution risk.
• Reassess after the data. I adjust views once the facts are in, not before.

Risk control is the anchor. Position size beats conviction when the tape is moving fast. I am comfortable being early or late by a day if it lowers error risk. The goal is durable gains, not perfect timing.
 

Reading The Tea Leaves: What To Listen For

As you watch Powell, listen for a few phrases. If he highlights “real progress” on inflation and a “better balance” in the labor market, hopes for a rate cut will strengthen. If he repeats that policy must stay “restrictive” for “some time,” expect a firmer rate path.

In the housing reports, look at the supply side. A step up in months’ supply can pressure prices unless demand rises. Incentives from builders may boost sales, but they can also compress margins. On existing homes, watch the share of first-time buyers. If it grows, affordability is improving at the margin.

For PCE, the revisions can matter as much as the current print. Back-month changes sometimes alter the trend. Also, watch the difference between core goods and core services. Goods deflation has helped. Services need to cool further to hit the Fed’s target over time.
 

Voices And Vibes From The Field

Data tells one story. The field tells another. I value what realtors and builders see firsthand. Traffic at open houses. Buyer inquiries. Cancellation rates. These give early hints. If you are in the trenches, your read adds color to the numbers.

“Realtors and builders, let me know what the vibes on the ground are.”

In recent months, some builders reported steadier foot traffic as they used rate buydowns. Realtors in tight-supply markets saw multiple offers return for well-priced homes. Others reported slow showings where affordability is most stretched. I weigh these notes alongside the data to gauge momentum.
 

Managing Expectations Through Friday

Markets sometimes move ahead of the news. Traders try to front-run the outcome. That can lead to a “buy the rumor, sell the news” pattern. It can also lead to a snapback if the news is different from what is expected. Patience helps. You do not need to chase the first move.

By Friday, we will likely have a clearer picture. Either policy hopes brighten, or they cool. Either housing shows signs of life, or it stays sluggish. Either inflation progresses or it stalls. The point is not to guess; it is to prepare for each path.

“Jerome, housing, inflation, all in one week. Grab your popcorn.”

Key Points To Watch

• Powell’s tone on inflation and growth will shape rate expectations more than any single line in the speech.
• New home sales may improve on incentives; existing home sales hinge on supply from locked-in owners.
• Core PCE’s month-over-month change and services inflation are the policy drivers.
• Expect higher volatility around the releases; have a plan for both outcomes.
• A long-term strategy should not pivot on a single week, but risk and liquidity checks are prudent.
   

My Bottom Line

This is a high-information week. Powell’s outlook, housing pulse, and PCE inflation will inform the next steps for rates and risk assets. I look for consistency across the signals. If all three indicators point to cooling inflation with steady growth, markets can continue to grind higher. If they point to sticky inflation or slowing demand, we may see a reset in pricing.

Stay focused on goals, not noise. Maintain sufficient liquidity to meet near-term needs while balancing rate sensitivity across holdings. And let the data come to you. We will have plenty to discuss by Friday’s close.

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