U.S. headline PCE was unchanged from the previous month, coming in above expectations.

Coinbase Chief Policy Officer Faryar Shirzad published an article pushing back against the American Bankers Association (ABA)’s concerns over stablecoin rewards. She noted that the ABA argues stablecoin platforms offering rewards would trigger deposit outflows from community banks and erode local lending, but existing data does not support this claim. Current laws already permit such rewards, and Coinbase has been paying rewards to USDC users for over four years. Shirzad pointed out that between June 2019 and March 2026, community bank deposits rose by 26%, an increase of roughly $482 billion; a study by Charles River Associates and the U.S. Council of Economic Advisers also found no significant correlation between stablecoins and bank deposits. The ABA is not seeking to amend technical details in the CLARITY Act. The current text prohibits users from earning returns solely on idle funds, but allows rewards for legitimate activities; the ABA’s proposed changes could expand restrictions to general stablecoin use cases, leaving questions such as whether merchant rebates qualify as bank interest to regulators and litigation for resolution. Shirzad called for retaining the existing compromise and passing the CLARITY Act, stating that the legislation would grant banks new powers including custody, staking, lending, payments, clearing, and market making.

US President Donald Trump stated, “I don’t think Iran’s Supreme Leader is dead; he may have been seriously injured.” He also reiterated that the United States’ blockade of the Strait of Hormuz remains in effect. (Jin10)

According to market data from BIT (bit.com), Meta Platforms (META) is up more than 4% in pre-market US stock trading. Court documents show that Meta Platforms has agreed to settle allegations that its platform harmed children. As part of the agreement, Meta will pay up to $166.8 billion to US states.

The U.S. annual inflation rate in July unexpectedly held steady, marking the 65th consecutive month it has remained well above the Federal Reserve’s 2% target. Disruptions from the Iran conflict have stalled the recent downward trend in inflation after it hit high levels, likely intensifying tense internal debates within the Fed over whether to raise interest rates or keep policy unchanged. Data released Wednesday by the U.S. Bureau of Economic Analysis (BEA) shows that the Fed’s preferred gauge—the U.S. July Personal Consumption Expenditures (PCE) price index—rose 3.7% year-over-year, matching June’s figure and coming in above the 3.6% analyst forecast. With trade talks between the U.S. and its second-largest trading partner Canada collapsing on Friday, a new wave of tariff-driven inflation pressure may be on the horizon. On a month-over-month basis, the July PCE price index rose 0.2%, also exceeding economists’ expectations. The index had fallen 0.1% month-over-month in June, its lowest level since April 2020. The BEA also revised second-quarter economic growth data, keeping the annualized growth rate of U.S. real gross domestic product (GDP) unchanged at 1.5%. (Jinshi)

The U.S. Personal Consumption Expenditures (PCE) price index, the Federal Reserve’s preferred inflation gauge, has been released. The annual PCE inflation rate stood at 3.7%, unchanged from June. Excluding the volatile food and energy categories, core PCE annual inflation hit 3.3%, also flat with June. Since the report incorporates other inflation data released earlier, PCE figures typically align closely with investor expectations. But as the Fed grapples with inflation, this report further clarifies the inflation landscape, and Fed Chair Walsh is set to deliver a key speech on Friday. U.S. CPI data brought good news in July: core CPI fell to a relatively moderate 2.5%. However, the PCE inflation rate assigns different weights to various spending categories, so its reading has consistently run higher. There remains significant uncertainty about how Walsh views the inflation challenge he has taken on. He has not included his own economic projections in the quarterly dot plot, which aggregates Fed officials’ outlooks for the economy and interest rates; nor has he signaled whether he might support additional rate hikes at upcoming meetings, an issue that has sparked divisions among Fed officials. (Jin10)

Market pricing indicates that expectations of a Federal Reserve rate hike have slightly risen, after U.S. government data revealed the Fed’s key inflation gauge rose 3.7% year-on-year in July, slightly exceeding economists’ forecasts. Interest rate futures data shows that following the data release, the market estimates the probability of a Fed rate hike in September at around 42%, up from roughly 36% before the data was published. (Jin10)