The Macro Minute: Can we trust the August PCE & Q2 GDP data regarding the health of the US economy?
The host argues that the August PCE and Q2 GDP data are consistent with a resilient U.S. economy and his view that the economy will continue running hot through at least 2027. He concludes that this outlook is likely to keep upward pressure on bond yields, while current recession indicators point to a low probability of a developing downturn.
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Read the Full SummaryKey Points
The host says the data support his view that the economy’s “run at hot” phase is likely to continue through at least 2027.
The host says the September ISM manufacturing PMI report is mixed against forecasts of accelerating growth but supports his resilient-economy outlook.
The host says initial and continuing jobless claims, along with his recession indicators and business-cycle model, signal a low probability of a developing recession.
Resilient Economy, Higher Yields
The host says August PCE and Q2 GDP fit a resilient, still-hot U.S. economy outlook through at least 2027, which is likely to keep upward pressure on Treasury yields.
401(k) Treasury Risk
Responding to a community question, the host considers whether the government could steer 401(k) savings toward Treasuries and notes that many savers lack self-directed options.
Fiscal Pressures and Gold
The host argues that mounting fiscal, geopolitical, and political pressures could prompt extraordinary efforts to support Treasury markets, while rising gold allocations reflect central banks’ recognition of a changing system.
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