Economy

A March 2026 joint proposal from the Federal Reserve, FDIC, and OCC would reduce capital requirements for the largest US banks by a net 4.8% when Basel III revisions, G-SIB surcharge updates, and stress-test changes are combined. The package replaces two existing risk-based calculations with a unified approach covering credit, operational, market, and credit-valuation-adjustment risk. Public comments are due June 18, 2026, with no final rule date yet announced.

The Kansas City Fed's July 2026 Tenth District Manufacturing Survey was scheduled for release on July 23 but had not been posted when this guide was prepared, making it impossible to report the composite index or any subcomponent readings. The most recent available data showed June district manufacturing rising moderately, with raw-material and finished-goods price indexes reaching their highest levels since 2022. For regional context, the Philadelphia Fed's July survey showed a sharp improvement, with its general-activity index rising 31 points to 41.4, the highest since November 2021.

The July 22 Treasury reopening of its 20-year bond sold $13 billion at a 5.163% yield, with a bid-to-cover ratio of 2.64 — below June's 2.75 but above March's 2.36. Primary dealers absorbed 14.7% of competitive awards, up from 9.4% at the May new-issue auction, indicating modestly more dealer intermediation than in prior sales. The result reflects weaker headline demand compared to June's 4.927% clearing yield but fits within the range of the four most recent auctions for this security.

The ECB's July 23 meeting concludes with its deposit facility rate at 2.25%, set after a June 11 hike, while market pricing has shifted to fully expect two additional quarter-point increases before year-end as energy prices rise. Euro-area headline inflation eased to 2.8% in June, but ECB projections still place inflation above target into early 2027, driven primarily by energy. The meeting also corrects a common framing error: the Bank of Japan raised rates by 25 basis points on June 16, making it a major central-bank policy event between the ECB's June and July decisions.