The July FOMC meeting is obviously this week’s headliner, but it’s not the only marquee market event. Not even close.

Those interested in a comprehensive preview of the Fed meeting are encouraged to peruse “Last Hike?“, but suffice to say this week’s fully-priced 25bps increment may or may not be the final move of the cycle. It depends on the data.

Speaking of data, and speaking to the preponderance of notables due this week, the docket in the US is crowded to put it mildly. On Thursday, 18 hours after Jerome Powell’s press conference, markets will get the first estimate of Q2 GDP for the world’s largest economy. As of July 19, the Atlanta Fed’s GDPNow tracker stood at 2.4%. Consensus is looking for 1.8%.

You’re reminded that Q1 GDP was revised up materially from the advance read and also from the second estimate (shown in orange in the figure above). The third revision, delivered late last month, stunned markets.

The personal consumption component in the GDP report is expected to print 1.2% for Q2. The final read for Q1 was a very robust 4.2%. Thanks in no small part to the resilient US labor market, the American consumer has so far stood up to 500bps of Fed hikes. But pandemic savings buffers are widely expected to run dry at some point in Q4, credit card rates are the highest on record+ and the resumption of student loan payments in a few months may drag on spending at the margins. And yet, the wealth effect from Q2’s equity rally and a renewed rise in home prices could bolster spending among upper middle class consumers.

“Recession expectations have been diminished or delayed based on the durability of employment and consumption,” BMO’s Ian Lyngen and Ben Jeffery remarked. At some point, they went on, the momentum will wane “in keeping with the fallout from the dramatic global tightening over the last 18 months [but] for now, the incremental data points warranting concern have been insufficient to turn the tide of sentiment regarding forward growth.”

In the wake of an epic rally for US homebuilders (predicated on robust demand for new homes in the face of an acute resale supply shortage), macro mavens will eye the residential fixed investment component in the GDP report closely. It’s been a drag for eight straight quarters. New home sales data for June is due on Wednesday, four hours ahead of the Fed decision. Economists expect a 5.4% decline.

When it comes to the policy narrative, Friday’s ECI print is probably just as important as the GDP report. I’ll offer the customary reminder: This is the series which, according to his own dramatized retelling, compelled Powell to change his mind about the likely trajectory of inflation in the US. Consensus expects a 1.1% increase from the headline.

As the figure above makes clear, these readings are still very high historically. They need to come down for the Fed to be confident that wage growth is on a path back to levels consistent with consumer price stability.

All else equal, a hot ECI print would be bad news for risk assets, but markets will have a lot to trade on by the time the data is released, so all else won’t be equal.

Personal spending data for June, along with updates on the PCE price gauges, will be released concurrent with the ECI report. The impact of the spending update will be blunted by the previous day’s GDP release, but the PCE price data will be scrutinized for any additional evidence of moderation in the collection of categories that comprise the “core services ex-housing” metric the Fed is watching for signs of sustainable moderation in underlying inflation. The CPI report offered good news in that regard, but the CPI-derived version of that metric differs in important ways from the PCE version.

As for the “regular” core PCE series, markets are hoping for a 0.2% monthly gain. That’d count as benign. Anything hotter would be an irritant.

Bottom line: Friday’s figures are material for the US inflation story. Ideally, both ECI and the PCE-derived core services ex-housing measure will come in cool, or at least oblige policymakers (and the equity rally) by not printing meaningfully ahead of expectations.

In addition to the new home sales data mentioned above, this week also brings updates on both key national price gauges (FHFA and Case-Shiller). Consensus expects monthly gains on both. Pending home sales figures for June are due Thursday, an hour and a half after the GDP report and the weekly jobless claims update.

On Monday, S&P Global will release flash estimates for its manufacturing and services PMIs. In addition to the home price figures, Tuesday also brings the July vintage of Conference Board confidence. The final read on Michigan sentiment for this month rounds out the data on Friday afternoon, by which time anyone who isn’t on vacation will be thoroughly exhausted.

Also on deck: Earnings from Google, Meta and Microsoft, as well as the July ECB meeting and a BoJ gathering that could (but probably won’t) include market-moving tweaks of some kind.