JGBS: Modestly Cheaper Across Benchmarks At Lunch Break

US President Donald Trump is shortly due to deliver remarks at the rescheduled White House Correspondents' Dinner. LIVESTREAM

• C-Span notes that the previous event was rescheduled due to an incident where a gunman opened fire outside of the event near where President Trump, dignitaries, and the press were seated.

We've published our preview of the July FOMC meeting - Download Full Report Here

• Markets come into Fed decision week eyeing a significant chance of the first rate hike since July 2023. We agree there is a plausible case for a hike at this meeting, both in terms of the macro landscape and in terms of other considerations such as reinforcing perceptions of the Fed’s independence.
• But while another set of strong inflation and payrolls data since the last meeting would likely have cemented the case, the base case now probably closer to 20% for a hike at this meeting (slightly lower than market pricing) with September being more likely given recent data and what we’ve heard from Committee participants.
• A hawkish hold is almost universally expected but it’s hard to see how we will get clear signals of the Fed’s intentions in the Statement given Chair Warsh’s inclination against forward guidance.
• Without the usual compromise of allowing hawks to express their tightening bias in the Statement, the signals may come largely in the form of rate dissents (2 or more favoring a hike immediately).
• Additionally, though we don’t expect to get much insight on future policy from the press conference, we will be paying attention to how Warsh characterizes the Committee debate over whether to take action at this meeting.

MNI’s separate preview of sell-side analyst summaries to follow on Monday Jul 27

There are various notable US data releases throughout next week but the pick is likely Thursday’s national accounts/PCE dual release at 0830ET. 

• The national accounts release will see advance Q2 figures, with an early look at Bloomberg consensus eyeing real GDP growth at 2.3% annualized compared to a less pessimistic 1.7% from the Atlanta Fed’s GDPNow after 2.1% in Q1.
• Tracking could be updated after advance goods trade data on Tuesday in particular, but for now net exports are seen as a heavy drag in Q2 (GDPNow -1.35pp vs -0.4pp in Q1) with an offsetting acceleration from PDFP (2.9pp vs 1.5pp). Personal consumption is seen driving the sequential improvement in the latter with non-residential investment moderating somewhat but still extremely strong as the AI data center buildout continues.

• On the pricing side, surprisingly subdued CPI and PPI reports have seen analyst estimates ease to circa 0.18% M/M for core PCE inflation in June after 0.32% M/M in May or a six-month average of 0.34% M/M.
• If accurate and crudely assuming no revisions, it would see core PCE inflation ease back a tenth to 3.3% Y/Y after the 3.4% in May was it highest since Oct 2023. For recent context, this rate was at 3.05% Y/Y in February prior to the start of the US-Iran war and saw a recent bottom of 2.6% Y/Y in Apr 2025 before tariff impacts started to show.
• Again though, recall that various incoming methodology changes are generally estimated to bias annual core PCE inflation lower by ~0.2pps, due in September with changes expected to be applied retroactively.