Global Macro · Week of August 12, 2026
Sticky 3% inflation traps the Fed as buyers, jobs, and supply chains reprice
- July CPI Hits 3% as Tariff Pass-Through Traps Warsh's Fed Between Hikes and a Cooling EconomyDurable goods prices, excluding cars, rose 7.1% over the past three months — the highest rate since 2022 — and 0.8% in July alone, which Morningstar's Preston Caldwell says is "very likely owing to tariffs."
- Payrolls Fall, Unemployment Drops, Participation Hits a 1976 Low: The Labor Market's Broken SignalsPayrolls fell by 23,000 in July. The unemployment rate also fell, to 4.1%.
- Private Buyers Replace Central Banks as Treasury's Base, and the Long End Turns PoliticalThere is a conspiracy theory making the rounds on trading desks, and it is worth taking seriously precisely because it is wrong.
- The Decoupling That Wasn't: Chinese Value-Added Barely Falls as Exports Surge ElsewhereArticle — "The Decoupling That Wasn't: Chinese Value-Added Barely Falls as Exports Surge 24% Elsewhere": Here is the contradiction hiding inside two numbers from the same Peterson Institute brief. One says the trade war …
- Reshoring Gets Real: First US Germanium Line, but Scale and Skills Lag ChinaHere is the contradiction most people miss about reshoring: the hard part was supposed to be the chemistry, and the chemistry just got solved.
Threads we are following
- Whether the September meeting delivers the amputated cut markets still price at 94%, or confirms Warsh's hike-or-hold machine
- Whether the next inflation print runs hotter than expected as a shrinking supply side fails to absorb steady demand
- Whether Treasury actually cuts 30-year issuance at the next refunding, and how the long-end buyer base responds
- Whether QIMA's China inspection share keeps climbing past its Q2 2026 six-quarter high as Southeast Asia's tariff advantage stays closed
- Whether the remaining three Phase I lines at Marion (gallium, light and heavy rare earths) commission on schedule over the next six months
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