Offline24h

Chicago Fed’s Goolsbee voiced skepticism over assumptions that tariffs won’t fuel inflation or weaken the labor market, stressing the need for several months of falling inflation alongside a clear cooling in jobs before supporting rate cuts. He noted that the recent slowdown in job growth may reflect reduced immigration rather than weak demand, with a 4.2% unemployment rate and low layoffs signaling labor market resilience. Ahead of the September FOMC, he will remain data-dependent and adjust his stance as needed. On the fiscal side, July’s deficit widened 19% YoY to $291B, with tariff receipts surging to $27.7B—more than triple last year on Trump-era hikes—but overshadowed by record spending, notably +10% in healthcare and +9% in Social Security, while interest payments hit new highs, underscoring persistent fiscal strain. UST yields fell across the curve as markets priced in September Fed cuts; NY close saw 10Y at 4.2326% (-5.62bp, range 4.3004%-4.2230%) and 2Y at 3.6745% (-5.63bp, range 3.7412%-3.6641%). Core European sovereigns followed, with long-end Bunds down over 7bp and OATs, BTPs, and Bonos at least 7bp lower. Focus now shifts to July PPI, expected to accelerate from 2.3% to 2.5% YoY.