Well, now we're going to dig a little deeper into the Treasury market where the tenure is hovering below a key level. Rick Santelli joins us now from Chicago with the bond report. Yes, indeed.And we might be hovering below a key level at four and a quarter, but we're well above a very significant level, 4%. If we look at this morning's data, one thing that really stuck out, we indeed did have strong personal income and spending as you were just discussing. But taking politics out, inflation's sticky.I don't ...

Well, now we're going to dig a little deeper into the Treasury market where the tenure is hovering below a key level. Rick Santelli joins us now from Chicago with the bond report. Yes, indeed.And we might be hovering below a key level at four and a quarter, but we're well above a very significant level, 4%. If we look at this morning's data, one thing that really stuck out, we indeed did have strong personal income and spending as you were just discussing. But taking politics out, inflation's sticky.I don't ...

Summary of Key Points from the Conference Call Industry Overview - The conference call primarily discusses the **North American economic outlook**, focusing on **core PCE inflation** and **PPI data**. Core Points and Arguments 1. **Revised Core PCE Inflation Estimate**: The tracking estimate for July core PCE inflation has been revised up by 6 basis points to **0.307%** from a previous estimate of **0.243%** [2][9] 2. **June Core PCE Inflation Revision**: Backward revisions to PPI data suggest that June core PCE inflation will likely be revised up by **2 basis points** [2] 3. **Three-Month Annualized Core Inflation**: If the forecast materializes, the three-month annualized pace of core inflation is expected to increase to **3.22%** in July from **2.70%** in June [2][8] 4. **PPI Components Performance**: PPI's portfolio management and investment prices rose sharply by **5.4%** month-over-month, significantly higher than the forecasted **2.7%** increase [6][9] 5. **Airline Fares Impact**: The increase in portfolio management prices was only partially offset by a decline in airline fares, which fell by **2.3%** month-over-month [12][9] 6. **Federal Reserve Rate Cut Expectation**: The expectation remains for the Federal Reserve to deliver a **25 basis point** cut at the upcoming September meeting, despite the upside surprise in portfolio management prices [9][20] 7. **Core PCE Tracking**: Core PCE is tracking close to the Fed's year-end forecast of **3.1%**, allowing officials to focus on downside risks to growth and employment data [9][20] 8. **Inflation Above Target**: Inflation is currently running well above the Fed's **2%** target, making a **50 basis point** cut unlikely [21] Additional Important Insights 1. **Broadening Price Pressures**: There are signs of broadening price pressures beyond the components that directly feed into core PCE inflation [12] 2. **Final Demand Services Growth**: Final demand services grew by **1.1%** month-over-month, marking the largest advance since March 2022, primarily driven by margins for final demand trade services [13] 3. **PPI's Finished Consumer Goods Prices**: The price index for finished consumer goods continued to rise in July, consistent with factory survey reports [13][18] This summary encapsulates the critical insights from the conference call, highlighting the economic indicators and expectations surrounding inflation and Federal Reserve policy.

Investment Rating - The report suggests a dovish outlook for the Federal Reserve, indicating potential rate cuts in September due to weak consumer spending and subdued core PCE inflation [1][8]. Core Insights - Consumer spending has shown signs of persistent weakness, particularly in services, with a nominal increase of only 0.1% MoM and flat real terms, leading to an overall decline in personal spending [5][7]. - Core PCE inflation increased by 0.179% MoM, slightly above expectations, but still subdued enough to support the case for rate cuts [4][8]. - The report highlights a significant decline in travel-related spending, particularly in air travel and hotel accommodations, which have seen declines every month this year [7][8]. Summary by Sections Consumer Spending - Personal spending fell by 0.1% MoM in nominal terms and 0.3% in real terms, with goods spending declining by 0.8% MoM [5]. - Services spending showed unexpected weakness, with a nominal increase of only 0.1% MoM and flat in real terms, indicating a broader trend of reduced consumer demand [5][7]. Inflation Metrics - Core PCE inflation was reported at 0.179% MoM, slightly stronger than consensus but still indicative of a soft inflation environment [4][8]. - The report suggests that weak consumer demand limits the ability of firms to pass through tariff price increases, reducing the risk of broad-based inflation [8]. Employment Implications - The report indicates that weaker consumer demand could lead to softer hiring, raising downside risks to the Federal Reserve's employment mandate [8].