August PCE came in slightly cooler than expected, up 0.3% for the month and 3.4% on an annual basis, versus estimates of +0.4% and 3.7% (1). Markets took that as a welcome sign today, with investors growing more hopeful that the Federal Reserve may pause its anticipated rate hike next month.
Adding to the mixed picture, second-quarter GDP showed the economy grew at a solid pace, driven by strong consumer spending and continued buildout of AI-related infrastructure investment(2).
As September draws to a close, the bond market remains elevated, with the 10-year yield reaching 5.30% today and the 30-year, touching 5.65%, levels not seen in years (3). While volatility persists, both Treasury and municipal bonds are reshaping the investment narrative, as yields at these levels have become too attractive for investors to ignore.
