US personal income rose 0.4% month-over-month in July, unexpectedly expanding, while personal consumption expenditures slowed to 0.2% month-over-month, the lowest growth so far this year. The July PCE price index accelerated to 0.2% month-over-month and 3.7% year-over-year, and the core PCE price index also accelerated to 0.2% month-over-month and 3.3% year-over-year, but there is no overheating in price increases, and they may have passed their peak. This has strengthened expectations that the Federal Open Market Committee (FOMC) will hold the policy rate steady. On the 28th, Chair Warsh is scheduled to speak, with attention particularly on his remarks following Treasury Secretary Bessent's announcement of support for the Treasury market. According to a CNBC survey, 80% of experts said the Chair should present an economic outlook, and 77% believe the Treasury's bond market intervention will fail to lower long-term rates.
PCE inflation accelerates but no overheating, strengthening Fed hold expectations, keeping policy rate steady.
Fed hold expectations and Treasury support announcement may not lower long-term rates, keeping yields elevated.
