🏦 US growth just hit its slowest pace in a year
Today's data drop is one of those where the good news and the bad news are so tangled together it's hard to know which way to feel — so let's just work through it.
Listen to the same-day episode — Ep. 029
🏦 US growth just hit its slowest pace in a year
Today's data drop is one of those where the good news and the bad news are so tangled together it's hard to know which way to feel — so let's just work through it.
Alex Monroe
July 31, 2026
⏱️ ~4 min read
📊 Today's Numbers
US Q2 GDP ▼ +1.5% annualised: slowest growth since late 2025
Core PCE (June) ▼ 3.3% YoY: smallest monthly rise in over a year
Fed Funds Rate ■ 3.50–3.75%: held 9-3, new data won't shift that fast
Bank of England Rate ■ 3.75%: held, but three members voted to hike now
Nasdaq 100 ▲ +3.4%: best single session in over a month
S&P 500 ▲ +1.7%: Microsoft carried the index
🏦 MACROECONOMIC
Photo: Miles Burke
The Economy Slowed. Inflation Cooled. The Reason Is the Same War.
Yesterday's GDP and PCE prints tell a coherent story, but not a comfortable one. Growth slowed sharply in Q2 and inflation eased partly for the same reason: energy prices fell, and they fell because of what's happening in the Middle East.
Q2 GDP grew 1.5% annualised, missing the 2.1% consensus and decelerating from Q1's matching 2.1% reading, with federal spending cuts and inventory drawdowns doing most of the damage
Core PCE rose just 0.1% month-on-month in June and 3.3% year-on-year, the smallest monthly gain since March 2025, giving the Fed cover to stay patient rather than hike in September
Headline PCE actually fell 0.1% in June, the first monthly decline since April 2020, driven by a 5.9% drop in energy goods prices
The dual squeeze on workers continues: slower growth raises layoff risk, while core inflation at 3.3% keeps eroding real wages at the same time
💬 The good news and the bad news are basically the same war, just viewed from two different angles.
🛢️ COMMODITIES
Photo: Mark Stebnicki
A Drone Hit an American Gas Tanker in Egypt. The Suez Is Now the Last Safe Route.
For the first time since the Iran-US war began in February, a strike landed on Egyptian soil. A drone hit a US-owned LNG storage vessel at Damietta on July 29, spreading fire to a second ship and disrupting one of Europe's key gas import terminals. Egypt's cabinet confirmed the attack the following morning.
Both LNG vessels were damaged and moved offshore, with analytics firm Kpler confirming direct disruption to regasification capacity at Damietta
The Suez Canal and Sumed pipeline are now the last safe northbound corridor for Saudi oil after sustained attacks on Hormuz and Bab el-Mandeb, meaning any further escalation here hits Europe's energy supply directly
Iranian state television had identified Damietta as a retaliation target days earlier, suggesting this wasn't random, and raising the question of what comes next
💬 European gas prices and UK home heating bills could move within weeks if this corridor takes another hit before winter.
🏦 MACROECONOMIC
Photo: Alaur Rahman
The Bank of England Held. Three Members Wanted to Hike Right Now.
The MPC voted 6-3 to keep rates at 3.75%, but the split is the story. Economists polled before the meeting expected a 7-2 vote. Getting a 6-3 means the hawkish minority is larger than markets had priced, and September is genuinely live.
Three of nine MPC members voted for an immediate hike at this meeting, a narrower majority than forecast and a clear signal that patience inside the committee is thinning
The Bank's new forecasts project UK CPI peaking at 3.2% in Q4 2026, nearly double the 2% target, before falling to 1.7% by early 2028
Markets now price a 35% probability of a September hike, after adjusting for the tighter-than-expected vote alongside the Bank's GDP forecast of just 1.1% growth in Q3
💬 Three out of nine policymakers wanted to raise your mortgage rate today. They were outvoted, but only just, and the debate resumes in September.
📰 Also Today
Microsoft +8.5%, Meta -9% on divergent AI earnings: Azure crossed $100 billion in annual revenue for the first time, sending Microsoft up 8.5% and pulling the Nasdaq 100 to its best session in over a month, up 3.4%; Meta's 9% drop on weak revenue guidance and cash-flow miss raised pointed questions about whether its AI spending is actually converting into returns.
Situational Awareness fund forced into rapid deleveraging: Leopold Aschenbrenner's AI-focused hedge fund unwound its levered public-equity book on July 30 after getting squeezed on both sides, long AI infrastructure names including SK Hynix fell while software shorts like Adobe rallied against it; Bank of America, Goldman Sachs and JPMorgan Chase were all named as prime brokers managing the margin calls and position sales.
Asia futures point higher heading into July 31 open: Equity-index futures for Australia, Japan and South Korea all turned positive after the S&P 500's 1.7% advance, with South Korean chipmakers including SK Hynix set to recoup some of Wednesday's forced-sale losses as the AI trade revived overnight.
🎧 Listen to today's episode — The Open Bell with Alex Monroe
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Not investment advice. For informational purposes only.