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US tariff revenues have surged, prompting the CBO to estimate a $4trn deficit reduction over the next decade, nearly offsetting the fiscal gap from Trump-era tax cuts. S&P and Fitch both affirmed the AA+ rating with stable outlooks, though Fitch cautioned that long-term debt risks remain unaddressed and projected debt-to-GDP to climb to 127% by 2027. While tariffs offer short-term fiscal relief, market-implied ratings remain weaker, reflecting doubts over debt sustainability. Fed’s Williams reiterated that the Sep decision hinges on incoming inflation and labor data, stressing policy independence and sidestepping political controversy around Trump’s push to remove Governor Cook. USTs rallied with the front end outperforming, as 2Y yields fell 6bp to 3.623% after trading lower throughout the day, while 10Y declined 3bp to 4.236%. In Europe, French 30Y yields spiked 5bp intraday to 4.45%, a 14-year high, highlighting fiscal concerns. Attention now shifts to Q2 GDP, consumption, core PCE, and jobless claims, with consensus expecting GDP at 3.1%, consumption at 1.6%, core PCE at 2.6%, and claims easing to 230k.