The U.S. economic landscape is at a critical juncture, with recent data potentially influencing the Federal Reserve’s decision on interest rate cuts. The unemployment rate’s unexpected rise to 4.1% in June has increased the odds of a September rate cut to 72%, up from 47% a month ago. This development brings the economy closer to triggering the Sahm Rule, a respected recession indicator. As Fed Chair Jerome Powell prepares for his semiannual testimony, investors are keenly watching for signals about the Fed’s stance on its dual mandate of maximum employment and stable prices. The upcoming Consumer Price Index data and two more employment reports before September could be pivotal in determining the Fed’s next move.