Indirects took 76.73%, down from July's near-record 81.49% but still respectable, as foreign buyers once again parked their excess cash in Uncle Sam's decade-long IOUs for lack of a better alternative, while Dealers were left holding just 8.6%, one of the lowest showings on record. The bid-to-cover of 2.532 sat comfortably in the same 2.50%-ish range it has occupied for a decade — a monument to the market's remarkable ability to absorb ever-higher yields on ever-larger debt while calling the whole thing "no problem finding buyers."

When your 10-year debt prices at the highest yield since the last financial crisis and the market calls it "solid," the definition of solid has quietly been marked to a 19-year low.

July PPI delivered the market exactly the "cooler than expected" headline it ordered, with producer prices unchanged MoM and the annual rate sliding from 5.5% to 4.7% — a triumph of disinflation achieved almost entirely by the same mechanism as every other "good" inflation print this year: a 5.7% plunge in gasoline prices during the brief window when the Iran ceasefire was still theoretically alive, before it was cancelled, re-bombed, and reduced to six vessels transiting Hormuz on Monday and exactly one on Wednesday. Strip away the war-driven energy deflation and the picture is considerably less soothing: final demand services rose for a second straight month, portfolio management fees surged a remarkable 6.5% — because as stocks melt up, the cost of managing other people's money melts up faster.

The CPI-PPI spread continues flashing the same margin-compression warning it has been flashing all year while everyone celebrates the headline. In short, the only thing bringing inflation down is the temporary cheapness of the oil the war made expensive, while the sticky, structural, services-driven inflation quietly compounds beneath a number the consensus has already declared a victory.

Capping a week of thoroughly deplorable long-end auctions, the Treasury sold $25 billion in 30-year paper at a high yield of 5.216% — the highest since 2001, back when the iPod hadn't shipped and the national debt was a quaint $5.8 trillion rather than the $40 trillion approaching this month.

The auction tailed the When Issued by 0.4bps, its second consecutive long-end tail after Wednesday's equally ugly 10-year, both apparently the direct consequence of Warsh leaving the long end "hang out to dry" at his last FOMC meeting — proving that the new Central Banker-in-Chief has at least mastered the art of talking the front end down while the back end quietly revolts.

Foreign demand, having binged on July's near-record 77.7% indirect take, sobered up to 66.9% this month, Dealers were stuck with 11.5% — 150bps more than July's skeletal showing — and the bid-to-cover slipped below average, confirming that the world's appetite for lending the Empire money for three decades diminishes in direct proportion to the maturity. The truly ominous question is not whether this auction was weak but how much higher the long end can climb before something, somewhere, finally breaks.

When the yield of the 30-year debt of the Empire prices at a 25-year-high yield the same month its debt pile crosses $40 trillion, the bond market isn't demanding a risk premium — it's quietly repricing the word "risk-free."

The Macro Butler is back on Discourse With Christian — and the war map just got a lot more dangerous. 🎙⚔️🔥

He joined Christian White for a no-holds-barred deep dive into the escalating war cycle the consensus keeps pretending is winding down. This one connects every dot:

Turkey likely enters the war — a NATO member with the alliance’s second-largest army, now bound to a new Islamic defence pact, sitting on the Bosphorus with the power to reshape the entire Black Sea theatre.

Europe’s relentless march toward war with Russia — conscription reintroduced, defence budgets exploding, an anti-ballistic coalition built around a missile that doesn’t exist yet, all financed by a continent marching toward an inevitable sovereign debt reckoning.

🚩 False flags and the machinery of escalation — how narratives get manufactured, chokepoints get closed, and populations get prepared for the next phase of a conflict they never voted for.

From the Black Sea grain corridor to the Strait of Hormuz to the widening ring around Iran — The Macro Butler maps the geopolitical fault lines that will drive oil, gold, and the inevitable Trump Stagflation through the second half of 2026 and beyond.

Zero hopium. Zero soft landings. Just the macro playbook history keeps validating.

🎧 Watch the full conversation with Christian White now.
Are you positioned for the war cycle — or still waiting for the peace deal that keeps getting bombed? 👇

https://themacrobutler.substack.com/p/interview-with-discourse-with-christian-084

Having spent June celebrating a services boom powered by the FIFA World Cup and Fourth of July fireworks, the American consumer has now delivered the inevitable sequel: July retail sales plunged 0.6% MoM — the biggest monthly drop since May 2025 and a spectacular miss against the +0.1% expected — as the World Cup hangover set in, the July 4 heatwave kept everyone indoors, and Prime Day was pulled forward into June, robbing July of its online spending. The all-important Control Group, which feeds directly into GDP, fell 0.4% against a +0.3% expected — a full percentage-point miss that quietly downgrades Q3 growth while nobody on the celebration circuit mentions it. Non-store retail posted its second-biggest monthly drop since COVID, confirming that once the birthday party and the football tournament ended, so did the spending they briefly manufactured.

The truly instructive detail, however, is that adjusted for CPLie, real retail sales plummeted 0.6% from June's supposedly Goldilocks levels — collapsing right back to where they sat before the Empire hosted the World Cup and threw itself a $2 billion 250th-birthday party — confirming that the entire "resilient consumer" narrative of early summer was less an economic trend and more a temporary sugar high manufactured by a football tournament and a fireworks display. Strip away the confetti, the commemorative merchandise, and the stadium concession stands, and the American consumer is exactly where they were before the celebrations began: broke, stretched, and financing groceries on credit cards at 21% interest, only now without a tournament to distract them from the bill.

The American consumer's economic recovery was powered by the World Cup and a birthday party — and the moment the confetti settled, July's receipts were left to sweep up the mess.