A Macro Pilgrim's Ledger - The Santiago Way (8/31/25)
From last week’s shocks to this week’s setups...are you prepared for the turn?
“Walking the path of global markets, one step at a time.”
There are moments in markets when you can feel the air change. Traders don’t necessarily say it out loud, analysts don’t write it in their notes, but everyone knows something is different.
You sit at the desk, the screens still track the same data—charts flicker, releases drop, headlines scroll. All familiar, all routine. And yet, something feels different. The weight of it has shifted. The numbers haven’t changed, but the prism through which the world is forced to interpret them has.
That’s what happens when a framework breaks. Week before last, policymakers in Jackson Hole admitted the models they’ve leaned on no longer fit the terrain. That single admission was enough to turn every calendar release into a potential landmine.
Confidence, growth, inflation, labor…ordinary checkpoints suddenly became moments of reckoning, not because the numbers were shocking, but because no one is sure how they’ll be interpreted under the new rules.
Markets can live with good news or bad news. What they struggle to live with is a shifting definition of what news even means.
That’s where we are now: navigating not just the outcomes, but the uncertainty of how the referees will call the game.
The Week That Was
The calendar we set out a week ago delivered exactly as expected.
On Tuesday, August 27, the U.S. Consumer Confidence report showed that household sentiment eased modestly following the run-up in equities.
It was a reminder that confidence remains sensitive to borrowing costs and market swings, and not an all-clear signal that consumers are immune to tighter financial conditions.
On Wednesday, August 28, the BEA’s second estimate of Q2 GDP confirmed that the U.S. economy continues to grow at a steady pace. The revision was limited, but it underscored that momentum is still firm enough to complicate calls for imminent Fed easing.
Thursday brought the twin releases we highlighted: jobless claims and the PCE Price Index.
Claims remained near recent levels, underscoring the resilience of the labor market.
At the same time, PCE inflation reinforced the Fed’s challenge: headline numbers moderated, but core measures remained sticky.
Together, they left the impression of an economy still running strong enough to resist pressure for early policy relief.
Friday, August 30, shifted attention overseas and to the manufacturing front.
The Eurozone CPI flash estimate printed in line with expectations, keeping the ECB boxed in between a sluggish economy and the risk of currency volatility if it diverges from the Fed.
In the U.S., the Chicago PMI slipped further into contractionary territory, flagging ongoing pressure in the manufacturing sector.
As expected, Fed officials also spoke in the wake of Jackson Hole.
Their remarks revealed division within the Committee: Governor Waller openly advocated for rate cuts to begin in September, while New York Fed President Williams emphasized that every meeting is “live” and contingent on data.
The combination reinforced that the Fed is no longer providing strong forward guidance and that markets must parse every release with greater care.
Commodities, which we flagged as being at key inflection points, attempted to stabilize but ultimately struggled to regain momentum.
Crude oil and copper both remained under pressure, with weakness persisting into week’s end.
Technical signals we pointed to also unfolded: equities consolidated after a strong run, Treasuries slowed their steepening move, and commodities tested their levels without resolving direction.
Every bullet we highlighted in last week’s “Week Ahead” played out in real time.
The week’s events did not provide resolution so much as confirmation that the market is adjusting to a world where no datapoint can be dismissed.
Keep reading to understand why and what could happen next week.