Each week I pull together the economic and market data I find most useful. This week the data cover US growth estimates, service-sector activity, the housing market, jobless claims, earnings breadth, market concentration, and a detailed look at the Treasury General Account and the government’s expanded bond buyback program, including Stanley Druckenmiller’s response to it. As always, I report what the data show. What you do with it belongs in a conversation with your planner.
US Economy
US underlying growth measures are broadly strong. Our daily underlying growth estimate has been stable at around 2.9%, well above potential growth. The Goldman Sachs Current Activity Indicator accelerated sharply. The New York Fed nowcast points to Q3 growth of 2.3%.
Service-sector activity reached the highest level since the end of 2024, offsetting a slowdown in manufacturing. Price pressures eased considerably. Consumer sentiment remains low across measures. Consumer spending excluding gasoline and nonstore sales, based on Bloomberg’s data, has slowed. The mismatch between the number of home sellers and home buyers has completely flipped since the 2021–2022 period.
Estimated number of US homebuyers and sellers actively in the market, 2013 to 2026.
Source: Redfin via @JeffWeniger
Commercial banks no longer hold significant excess reserves, leaving bank liquidity substantially tighter and increasing the risk of funding-market stress if reserves decline much further.
New home sales fell sharply to a six-month low. Elevated mortgage rates have added to affordability challenges.
Initial jobless claims fell more than expected to 203,000. The four-week moving average edged up but remained near secularly low levels, suggesting limited layoffs. Continuing claims edged down.
US Stock Market
Global earnings breadth remains strong, with the share of countries experiencing year-over-year forward EPS downgrades near cycle lows. S&P 500 EPS growth is coming from both top-line growth and margin expansion. Computer memory prices fell for decades, …
Lowest recorded price of a terabyte of memory through 2023, by storage type. Chart: Elliot Bentley. Source: John C. McCallum and US Bureau of Labor Statistics via Our World in Data
Source: Datawrapper
… until recently.
Average consumer prices for RAM and storage memory, 2025 to 2026. Chart: Elliot Bentley. Source: Pangoly
Large-cap company guidance has been extremely robust and points to another upcoming quarter of strong earnings growth.
The 10 largest US companies make up about 32% of total market cap—a hefty share, but that’s actually lower than in most other countries.
Market cap weight of each country’s 10 largest companies, based on the constituents of the SPDR MSCI ACWI IMI ETF. Source: The Daily Shot
The Fed
The New York Fed’s Survey of Market Participants showed the longer-run Fed funds target rate roughly stable at 3.1%. The market is discounting a terminal rate just under 4%
Treasury Secretary Scott Bessent may deploy part of the Treasury General Account (TGA) to fund expanded long-dated bond buybacks.
CNBC headline reporting that Treasury Secretary Bessent could tap the Treasury General Account to fund bond buybacks. Source: CNBC
Source: CNBC
The TGA is the federal government’s bank account at the Federal Reserve and carried a balance of $954 billion as of last Wednesday. The Treasury maintains a TGA buffer primarily as insurance against a temporary inability to issue debt.
Treasury General Account balance, 2006 to 2026. Source: The Daily Shot
Because the TGA is a Fed liability, a decline in the TGA with Fed assets unchanged produces an offsetting increase in bank reserves in a QE-like manner. However, the liquidity boost would be temporary, as investors would anticipate an eventual rebuilding of the Treasury’s cash balance, according to BCA Research.
The Federal Reserve’s balance sheet as of August 19, 2026, with the Treasury General Account and bank reserves highlighted. Source: The Daily Shot
Source: Ryan Swift, BCA Research, “What Can The Treasury Achieve With Bond Buybacks?” (August 2026)
I love what Stanley Druckemiller wrote on the topic:
His argument, in short: Treasury’s move to double long-bond buybacks to $4 billion wasn’t liquidity management; it was an attempt to manage the price of Treasury debt directly. Yields dipped at first, but, within a day, they fully round-tripped higher.
The market simply un-did it.
Druckenmiller walked through why that matters. The government is running a 6% deficit at full employment. Total debt is $40 trillion. Interest costs now exceed the defense budget. His point: the long bond is the only fiscal disciplinarian Washington has left. Suppress its yield, and you don’t fix the deficit; you just remove the pressure that would eventually force someone to. He drew a direct line to the Fed’s 1942–1951 wartime yield cap, which took a formal Accord to unwind, and warned this is the first step down that same road.
“If the 30-year must trade at 5.5% to clear, that isn’t a crisis. It is an invoice,” Druckenmiller wrote. “Then do the only thing that durably lowers long-term yields: address the primary deficit.” Data Source: Druckenmiller, WSJ
Sear this line into your brain:
“Governments defending prices against fundamentals always lose. The only variable is how much they spend before conceding.”
Great Quotes
“The way I see it, if you want the rainbow you have to put up with the rain.” – Dolly Parton
Picture of the Week
The Matterhorn, Switzerland
The Matterhorn, Switzerland
All content is the opinion of Brian Decker
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