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Macro Gone Wild... Taking Stock Of A Volatile Week
The Macro Institute's Weekly Economic Primer
The Macro Institute
August 04, 2025
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There’s not a lot of consequential data scheduled for release this week. Tuesday brings the July Services PMI figures from both Markit and the ISM, but beyond that, it’s a relatively light calendar.
One under-the-radar data point worth watching is released today: the Senior Loan Officer Opinion Survey (SLOOS) from the Fed. This quarterly survey of lending standards doesn’t usually make headlines, but it’s a powerful leading indicator.
In many ways, lending standards act as a form of shadow stimulus, or perhaps more accurately, a type of leverage on Fed policy. As the chart shows, today’s lending environment gives us a strong signal about future credit conditions, with a lead time of three to four quarters.
Bottom line: Pay attention to this one. It could offer an early read on where things are heading in 2026.
The Macro Week In Review
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The Macro Week Ahead
📝 Key Takeaways From A Consequential Week
With nearly 70 major data releases and a Fed meeting, last week was packed. Here’s how things played out:
Labor market indicators from JOLTS and ADP suggested continued cyclical strength, with the Quits Rate dropping 10 bps to 2.0%.
Q2 GDP surprised to the upside at +3.0% Q/Q. This was driven in part by falling imports, a technical boost to the GDP calculation amid tariff disruptions.
The regional PMI from the Dallas Fed and the Conference Board’s Consumer Confidence both beat expectations, showing resilience following the Liberation Day sentiment shock.
These hawkish indicators shaped Powell’s tone at the FOMC. The Fed held rates steady, but his comments on tariff-driven inflation, falling labor supply, and strong data read hawkish. Notably, two FOMC members dissented in favor of a 25-bps cut. Odds for a September rate cut dropped from 68% to 40%.
Then came Thursday and Friday…
June’s PCE rose more than expected (Headline: 2.6% vs. 2.3% prior, Core: 2.8% vs. 2.7%), with import-heavy categories showing sharp price increases. This supported Powell’s inflation concerns.
But Friday’s July jobs report hit with a thud. Payroll growth missed badly, unemployment ticked up to 4.2%, and ISM employment dropped to 43.4 (from 45). Suddenly, rate cut odds for September jumped back to 83.7%, with markets pricing in two cuts (50 bps) by year-end.
📆 This Week Ahead
It’s a quieter week for data, but Monday’s Senior Loan Officer Opinion Survey is the one to watch. This leading indicator offers a measure of credit standards at banks from small to large. Historically, it has a 12-month lead time on bank loan growth and is an early sign of easing credit standards, potentially setting the stage for expanding credit into 2026.
On Tuesday, the trade balance report takes on more relevance than usual. While not traditionally a key input for us, it now offers insight into consumer response to tariff-induced import costs. Given ongoing global trade negotiations and early-year distortions from tariff front-loading, we’ll be watching June’s import data for cleaner signals.
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