Bond Market Update

 Data Recon

• Personal income was up 0.3% month-over-month in July (Briefing.com consensus 0.2%) following an unrevised 0.2% increase in June. Personal spending jumped a healthy 0.5% (Briefing.com consensus 0.5%) following a 0.3% increase in June. The PCE Price Index was up 0.2% (Briefing.com consensus 0.2%), leaving it up 2.5% year-over-year, unchanged from June. The core-PCE Price Index was up 0.2% (Briefing.com consensus 0.2%), leaving it up 2.6% year-over-year, unchanged from June.
  • The key takeaway from this report is the recognition that it meshes nicely with the market's prevailing view that the U.S. economy will be able to avoid a hard landing and that the Fed will cut its policy rate because inflation is moving back toward the 2% goal.
• Yield Check:
  • 2-yr: +4 bps to 3.93%
  • 3-yr: +3 bps to 3.79%
  • 5-yr: +3 bps to 3.70%
  • 10-yr: +1 bp to 3.88%
  • 30-yr: UNCH at 4.15%