Announced this morning, Personal Income increased 0.1% in June, a bit more than expected. Personal Spending increased 1.0% in June, higher than expected and a rebound from the flat reading the previous month. The PCE Deflator, a measure of inflation, increased 0.5% in June and has increased 4.0% on an annual basis. The Core PCE Deflator, which excludes food and energy prices, increased 0.4% in June and grew 3.5% on an annual basis, which was less than expected. Overall, personal spending was firm in the month and above expectations as consumers continue to spend as the economy re-opens. Core inflation data was lower than expected, but still well above the Federal Reserve’s 2% average target, suggesting the Federal Reserve will need to continue addressing their stance on accommodative policy in the weeks ahead. In all, the 10-year yield ticks slightly higher, and equity futures are lower as we head into the market open.
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