We aren’t in the habit of betting on central bank decisions but it seems a racing certainty the Federal Reserve will cut interest rates this week as more evidence emerges that the US economy and inflation rate are slowing.

The only question in investors’ and economists’ minds was  by how much the Fed is likely to cut, with the odds favouring a 0.25% reduction in the Fed Funds rate rather than 0.5% which might be seen as a panic response.

There will have been particularly close attention paid to central bankers’ comments for clues as to how far and how fast (or more likely how slowly) rates might come down.

Some commentators have called for a 100 basis point or 1% cut by the end of this year followed by a further 100 basis points next year, but we can’t see the Fed, which has trodden cautiously every step of the way, lowering the cost of borrowing so far in such a short space of time.

In fact, the opposite is true – what the Fed really doesn’t want to see is inflation heading back up again in a year’s time because lower rates have encouraged people to spend with impunity.

Looking at the week ahead, most of the economic data is what we would call ‘soft’ as in it consists of surveys like consumer confidence and PMI (purchasing managers’ index) surveys.

The US and the Eurozone both show a clear divergence between confidence in the services sector and that in the manufacturing sector, with 50 being the dividing line between expansion and contraction.

The one piece of ‘hard’ data which will be of interest is the revision to US second-quarter GDP (gross domestic product) and the extent to which prices rose, which come out in a week’s time.

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