Core PCE, GDP, Durable Goods & Impact to Fed's Interest Rate Expectations

• May PCE data (headline and core) came in line with estimates, with personal income and consumption expenditures up 0.7% month-over-month.
• Q1 2026 GDP was revised up to 2.1%, surprising estimates of 1.6%, indicating stronger economic growth.
• Durable goods orders were mixed, with headline orders down less than expected (-4.5% vs. -5.0% estimate) and core new orders (ex-transportation) showing a significant beat (up 1.3% vs. 0.5% estimate).
• All 32 major banks passed the Fed's stress test, confirming their resilience even under severe recession scenarios, leading to dividend increases and buybacks from institutions like JPMorgan Chase, Wells Fargo, Morgan Stanley, and BNY Mellon.
• The speaker suggests the market is misreading the Fed's hawkishness, expecting inflation to cool (especially with crude oil at pre-war levels) and a very low probability of further rate hikes this year.

The video discusses recent economic data, including PCE, GDP, and durable goods orders, which largely met or exceeded expectations. It also covers the Fed's bank stress test, where all 32 major banks passed, leading to increased dividends and share buybacks. The speaker believes the market is misinterpreting the Fed's stance on interest rates, predicting a low probability of further hikes this year.