GDP slowdown and sticky inflation dim hopes of rate relief
Beneath the surface, domestic demand held up. Consumer spending accelerated to an annualized 3.2% rate in the second quarter, up from just 0.5% in the first quarter, the fastest pace in nearly a year.
Final sales to private domestic purchasers, a closely watched measure of underlying economic strength, surged to 3.9% from 1.7% in the prior period.
Business investment also remained robust, expanding at an 8.4% annualized rate.
Inflation stays sticky, pressuring the Fed
A separate Commerce Department report released Thursday showed the personal consumption expenditures (PCE) price index — the Federal Reserve’s preferred inflation gauge — rose 3.7% year-over-year in June 2026. That’s down from 4.1% in May but still well above the central bank’s 2% target.
Dave Meyer, chief investment officer at BiggerPockets, says investors are recalibrating their expectations, embracing a more stable market, and continuing to pursue opportunities despite borrowing costs remaining elevated.https://t.co/z4diYEAviA
— Mortgage Professional America Magazine (@MPAMagazineUS) July 29, 2026
Core PCE, which excludes food and energy, held at 3.3% annually, barely changed from 3.4% in May.
