US Economy Shows Resilience Amid Core Inflation Easing

The US economy showed resilience in the second quarter, with revised figures revealing faster growth than expected. The S&P 500 and Nasdaq indices both rose around 0.5% as data pointed to stable economic activity.

Revised GDP numbers indicated that the US economy grew at a pace of 2.1%, beating estimates. Consumer spending also increased, with a 0.6% monthly rise in August, higher than expected. The core PCE inflation rate eased to 3.0%, down from the consensus estimate of 3.3%. This led to a decrease in expectations for a Fed rate hike in October, with implied probability dropping to around 40%.

The US Treasury curve steepened as 30-year yields reached fresh highs, while 10-year yields climbed to 5.29%. In contrast, European equity markets were weaker, and the US dollar was mixed against G10 currencies.