Flat producer prices meet a 5.216 per cent bond yield and an AA+ warning

Producer prices hold flat as claims edge higher

Bureau of Labor Statistics reported that the producer price index for final demand was unchanged in July after seasonal adjustment, while the measure that excludes food, energy and trade services rose 0.4 per cent. Final demand goods fell 0.7 per cent, driven by a 3.1 per cent drop in energy prices; a 5.7 per cent decline in gasoline accounted for more than half of the fall in goods. Final demand services rose 0.2 per cent and construction advanced 2.2 per cent. Over the twelve months to July the headline index was up 4.7 per cent, and the core measure advanced at the same rate. The same week, Department of Labor said seasonally adjusted initial claims for the week ending 8 August were 209,000, an increase of 9,000, while the four-week average stayed at 199,000. The previous week was revised up by 1,000 to 200,000. Insured unemployment for the week ending 1 August fell 22,000 to 1,777,000, and its four-week average declined 5,250 to 1,785,500, with the insured rate holding at 1.2 per cent. Monthly headline producer-price pressure pauses while the twelve-month gain stays at 4.7 per cent; claims rise in a single week even as the insured unemployment stock keeps falling.^{[2], [3]}

The 30-year auction clears at 5.216 per cent

Treasury sold 25 billion dollars of 30-year bonds on 13 August 2026 at a high yield of 5.216 per cent, and 12.10 per cent of the bids at that yield were filled. The bid-to-cover ratio came to 2.39. The bonds carry a 5.125 per cent coupon and were priced at 98.627017; a price below par meant buyers asked for more than the coupon paid. Competitive bids totalled 59.7 billion dollars, of which 24.9 billion dollars were accepted, and total accepted bids came to 25 billion dollars. Among accepted bids the median yield was 5.150 per cent and the low yield 4.880 per cent. The bonds are issued on 17 August 2026 and mature on 15 August 2056. Treasury’s result table makes the long-term funding cost concrete through the high yield, the coupon–price gap and bid depth. The observed price is the published bid and allotment arithmetic.^[4]

Fitch holds AA+ and flags the deficit path

According to Asharq Al-Awsat, Fitch affirmed the United States sovereign rating at AA+ with a stable outlook, citing the size of the economy, high per-capita income and the dollar’s reserve role. Fitch now sees growth of 1.9 per cent in 2026 and 2027, down from 2.8 per cent in 2025. The agency expects inflation to average 3.4 per cent in 2026, above the Federal Reserve’s 2 per cent target, and the general government deficit to widen to 7.4 per cent of GDP in 2026 and stay there in 2027, the highest among AA-rated sovereigns. Higher military and interest costs, together with rising Medicare and Social Security spending, limit the room to close it; the agency also notes weakening labour demand and slower job creation. S&P Global affirmed AA+ in June; Fitch cut the United States from the top grade in 2023 and Moody’s removed the last triple-A last year. Flat July producer prices and claims at 209,000 sketch the near-term data window; the 5.216 per cent auction fixes a long funding cost; Fitch’s AA+ affirmation keeps the grade while spelling out a 7.4 per cent deficit path.^{[1], [2], [3], [4]}

Producer prices hold flat as claims edge higher

The 30-year auction clears at 5.216 per cent

Fitch holds AA+ and flags the deficit path

References

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