Yesterday’s inflation report is one of the last data points the Fed will see before its September meeting next week, but it did enough damage to already worrisome policy expectations. According to the CME's FedWatch Tool, there is now a 1 in 3 chance the FOMC will raise rates by a monster full percentage point, while the probability of a half percentage point fell to zero (meaning 75 bps is a given). If that's the case, a full-fledged recession could be around the corner, with rapidly rising borrowing costs pushing any prospects for a "soft landing" off the table.

As I mentioned earlier this week, another inflation threat is in the works, with a Western-style showdown threatening the U.S. economy. A duel between 60,000 rail workers, their unions and some of the largest U.S. railroad operators is already having impacts, but the worst is yet to come. A Friday deadline to agree to new work terms hangs in the balance, with the gunslinging likely to cost the nation $2B in economic output per day if things go off the rails.

The EU's General Court has upheld an antitrust ruling against Google parent company Alphabet for imposing unlawful restrictions to consolidate the dominant position of its Android operating system. It's a major fine at $4.1B, though it was reduced by 5% from the original $4.3B price tag following the appeal. The ruling bolsters the recent crackdown campaigns of European Competition Commissioner Margrethe Vestager, who has forcefully targeted U.S. tech giants over anti-competitive behavior and market dominance.