Trump's economy faces historic week on interest rates, trade, jobs and more

The U.S. economy is about to enter one of the busiest weeks economists have ever seen.Why it matters: The release of important national data this coming week — GDP! Jobs! Inflation! — will show whether the economy is still holding up under the weight of Trump's trade wars. The data will have implications for the Fed, which might offer hints next week about the potential for interest rate cuts that the White House has demanded. Also coming this week: Trump's expansive tariff policy, the key tenet of his economic agenda, will face a hearing that could wipe out most of the levies entirely. It's also the (latest) deadline for major trade partners like Europe, Canada and Mexico to reach trade deals with the U.S.What they're saying: "It is the busiest I can remember in 25 years of working," ING economist James Knightley tells Axios. "I can't think of a week that has seen such a concentration of A-list events," Knightley said.On tap this week:💸 GDP. The economy shrunk in the first quarter because of tariffs, even as underlying figures pointed to healthy activity. Expect the opposite dynamic in the Q2 GDP report (out Wednesday). The economy likely resumed growing in the April-June period as imports normalized, though under the hood, it might look weaker than the headline implies as households start to feel trade effects. 👷‍♂️ Jobs: There will be new data on job vacancies, layoffs and quits (Tuesday) and private sector hiring (Wednesday) — all in the lead-up to the July government payroll report (Friday). "If I had to pick one data release, I would say that the employment report is probably the most important," says Marco Casiraghi, an economist at Evercore ISI — adding that the set of labor reports will show "if cracks in the labor market are finally showing up."💳 Inflation: The Fed's preferred measure of inflation, alongside spending and income figures, will be released on Thursday.% Interest rates: The Fed, under immense pressure from the White House to cut interest rates, is widely expected to keep rates steady on Wednesday. Fed chair Jerome Powell, who has favored a patient approach to see how trade policy is impacting the economy, will defend the decision during a press conference. ⚖️ The courts: Oral arguments in the court case examining whether many of Trump's tariffs are legal begin on Thursday. ⛴️ Trade: The hearing comes one day before the White House said those tariffs will shoot higher for countries without trade deals, though top officials have hinted the deadline is flexible. 🇨🇳 China: The U.S. and China will hold a third round of high-level trade talks this week in Stockholm, ending on Wednesday. The talks could lead to a trade deal, or at least an extension of the truce due to end August 12. When it comes to tariffs, China headlines are all the market cares about.The bottom line: Trump policy is leaving a mark on the economy. Next week we found out just how big that mark is.

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