GDP Surprises, Trump Tensions, and Corporate Wins

The week in the United States was marked by a combination of economic, market, and political news reflecting a dynamic and uncertain scenario both locally and internationally. The upward revision of second-quarter GDP was one of the main highlights, as the economy grew at an annual rate of 3.3%, compared to the estimated 3.0%, driven by consumer spending and business investment, which rose 5.7%. The personal consumption expenditure (PCE) index, the Federal Reserve's preferred measure of inflation, remained in line with expectations in July, rising 0.2% month-on-month and 2.6% year-on-year, with the core rate at 2.9%. Orders for durable goods fell less than expected, down 2.8% in July, with a 1.1% increase when excluding aircraft. Currently, rate futures reflect an 85% probability that the Fed will cut 25 basis points at its next meeting on September 17.

On the other hand, we highlight that President Donald Trump finalized the dismissal of Fed Governor Lisa Cook following allegations of real estate irregularities, which led to a lawsuit against her. The controversy threatens the independence of the central bank and will continue in the courts. As a result, the yield curve steepened modestly during the week, with short-term rates falling faster than long-term rates amid perceptions that recent political developments could jeopardize the Fed's independence.

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