Year over year, Headline PCE rose 3.7% in June, off the 4.1% May peak but well above the 2.9% recorded in February before the Iran conflict began. Core PCE, which strips out food and energy and is what the Fed watches to judge the underlying trend, came in at 3.3%, up from 3.0% last December. The series disagrees with itself. That annual figure is still drifting up, but the last three months annualize to 2.9%, the softest since November. June's headline improvement was narrow: gasoline dropped below $4 during a mid-June ceasefire, helping pull the monthly index down 0.1%.  It has since reversed, with strikes resuming July 7 and gasoline back above $4.09.

CCM read: Core excludes food and energy, but household budgets do not. Those categories take a larger share of income the further down the credit spectrum you go. One month of relief is not a turn.

The FOMC held rates on a 9-3 vote, with three regional presidents preferring a quarter-point increase. That is the first three-dissent meeting since September 2016, and Chair Kevin Warsh offered no forward guidance to soften it. The immediate market reaction: the Dow fell over 1,100 points and the 30-year Treasury closed at its highest yield since 2007. Next decision is September 15-16, with two CPI prints in between.

CCM read:  Futures odds on a September hike have moved sharply this month and at times approached even money. That alone is a change worth tracking. Higher rates reach borrowers before they reach deals. Card balances and other floating-rate debt stay expensive, keeping payments high for the same households the ECI data says are falling behind on purchasing power. The cost to issuers comes later, in higher coupons on new deals and more expensive warehouse lines.

The University of Michigan survey rose almost 12% in July to 55.2, meaning more households told the survey their finances and buying conditions were improving than said they were getting worse. The level is still 11% below last July, and worth discounting either way. The index has sat near record lows for five years while consumers keep spending. It moves with gas prices and party affiliation as much as with anything a lender would underwrite.

The survey's questions re inflation expectations are worth noting. Households now see prices rising 4.2% over the coming year, down from 4.6% but well above the 3.4% they expected in February. Asked about the next five to ten years, they said 3.3%, after a spike to 3.9% in May that reversed within two months.

CCM read: Households are treating the current price surge as a temporary energy shock, not a lasting shift in prices. The gap between what they expect next year and what they expect over the next decade is the number to watch. If the longer view starts climbing on tariffs and fuel, the Fed's hawks may get their majority, and floating-rate consumer debt would reprice with them.