Can we trust the August PCE and Q2 GDP data regarding the health of the US economy?

Happy Thursday out there, Team 42. It's your skipper here, Darius Dowell, to present our Macro Minute for Thursday, October 1st, 2026. Happy day to my gorgeous wife and best friend. So, as always, we'll start with our executive summary from today's lead-off morning note, so let's dive right in. Today's key macro question is, can we trust the August PCE and Q2 GDP data regarding the health of the U.S. economy? The short answer is yes. As we've been saying since the April of 2025, our paradigm C, a.k.a. run-it-hot theme, is likely to persist through at least 2027. No change to this data-driven, robustly researched view. The key supporting evidence is the September ISM Manufacturing PMI report was mixed regarding the consensus forecast of accelerating growth. The September ISM Manufacturing PMI report supported our resilient U.S. economy and paradigm C, a.k.a. run-it-hot themes. The current levels of each of the primary sub-indices are above their respective long-run means. Also, initial and continuing jobless claims currently signal a low probability of a developing recession in the resilient U.S. economy, as do the 42 macro Fab Five recession signaling indicators and the 42 macro business cycle model. In fact, most component cycles are currently growing at or above trend. So what does this all mean for your portfolio? Persistence of paradigm C is likely to continue applying upward pressure on bond yield because the mean of 42 macro's five 10-year nominal treasury yield value models is currently 6.09%, 82 basis points higher than last price. If the Fed does not take incremental action to truncate, it's still a common native policy setting the bond market will likely continue to sell treasury until Besant via TGA-funded buybacks, Warsh via bank deregulation and/or yield curve control, or Besant, Warsh, and Zervos via Fed Treasury Accord 2.0 are forced to buy them. A Fed Treasury Accord 2.0 may feature reserve management purchases as unlimited funding for TGA-funded buybacks in defense of the Fed's congressionally mandated third objective: moderate long-term interest rates. Look it up. So as always, to wrap up with a question from our community, this one's titled "Trouble in 401k land." It says, "D.D., for the future, it would seem that many of the 401k accounts are ripe for the government to demand a percentage be invested in U.S. treasuries." I have a 401k that's managed by these pre-canned products. My company is selected. Most people do, and I feel sorry for them. I have other accounts too, but the 401k is something I can't do much about. I've checked into self-directed options, not available for me. And unfortunately, that is the sad reality for most people in these, in these, um, not-so-consumer-friendly products. I'll leave it at that. I know it's a risk. I just don't know the likelihood. And it would be interesting to hear your thoughts on how to mitigate this risk. Broad-based, general thoughts, not advice, of course. Um, I've never seen Circa 22, so I appreciate you guys. Uh, you know, we tend to find most of our members have been there for years. We have a very high customer retention rates in the 96% range. I mean, it's incredible. Uh, uh, you know, we would piss off some folks, but, you know, the vast, vast majority of people who, uh, join our community wind up staying, uh, for a long time. We're really, really grateful for that. Really blessed by that. Uh, cause it ultimately means that we're fulfilling our mission. Our mission is to help as many people on earth retire on time and comfortably. Um, I can educate you and make you laugh along the way. That's great. But my core mission in life is to have this. I want to be the guy who, when I retire can credibly say I help the maximum number of people on earth retire on time and comfortably. Because that's what Jackie Robinson told me to do. And that's what Jesus told. Jackie Robinson to tell me to do a life is not important except for the impact that it has on other lives. So getting into this question, answering the question. So, uh, in our view, they're going to pull out all the stops, uh, particularly when we start crossing some of these critical thresholds, you think about social security fund are running dry around 2020, 2030 to 2032. Um, you know, we've already crossed breached Ferguson's law in terms of net interest being persistently above national defense. That's historically been a real harbinger of negative outcomes for sovereigns, uh, obviously with the geopolitical dynamics. So, uh, you know, we've already crossed breached Ferguson's law in terms of net interest being persistently above national defense.