July PCE was in line with expectations: 0.2% MoM for headline and core, 2.5% YoY (2.6% excluding food and energy.) Personal income beat at 0.3% versus 0.2% and personal spending beat at 0.5% versus 0.3%.

The print does nothing to disturb expectations of a 25 bps rate cut in September. Futures are up modestly, leaving ES at our targeted price even though a 50-DMA backtest never quite materialized.

continued for members…

Our charts are essentially a repeat of yesterday’s. The 2s10s has backed off its recent highs and is back to a -5 bps inversion ahead of the holiday weekend. I’m wishing everyone a safe and enjoyable Labor Day!