August 26, 2026

July PCE inflation was +3.7%, while second-quarter GDP grew at an annualized rate of +1.5%

International

This morning, the Federal Reserve released its July Personal Consumption Expenditures (PCE) Price Index, the benchmark inflation measure for the United States. The core PCE, which excludes food and energy, rose 0.2% month-on-month, in line with expectations and above the previous 0.1% increase, while the year-on-year inflation rate remained unchanged at 3.3%. The overall PCE index also increased 0.2% month-on-month, exceeding the projected 0.1% increase, and reached 3.7% year-on-year, also surpassing the expected 3.6%. Additionally, the preliminary estimate of second-quarter Gross Domestic Product (GDP) was released, showing an annualized quarterly expansion of 1.5%, in line with forecasts, although below the 2.1% growth of the previous quarter.

The US Treasury yield curve compressed yesterday. The 10-year Treasury yield fell to 4.62% from the previous 4.70%, the 3-year yield dropped to 4.23% from 4.30%, and the 1-year yield settled at 3.98%, down from 4.01%.

Meanwhile, the main US stock indexes advanced yesterday. The S&P 500 rose 0.3%, the Nasdaq gained 0.7%, and the Dow Jones advanced 0.3%. Thus, year-to-date, the indexes have accumulated gains of 12.2%, 12.5%, and 11.5%, respectively.

Finally, commodities moved mixed yesterday, with marked declines in the energy sector. The price of WTI crude oil plummeted 5.3% to $80.48 per barrel, while Brent crude fell 6.3% to $86.34. In contrast, gold rose 0.2% to $4,662.88 per ounce, and soybeans advanced 1.1% to $451.63 per ton.

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