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WEEKLY MARKET UPDATE

November 28, 2022

General Market News

  • After the Federal Reserve (Fed)’s fourth consecutive rate increase of 75 basis points (bps), the recently released minutes from the early-November meeting indicate that most Federal Open Market Committee (FOMC) members could support dropping to a smaller rate hike when they reconvene in December. “A substantial majority of participants judged that a slowing in the pace of increase would soon be appropriate,” the minutes read. This comes as inflation remains at a stubbornly high level but is showing signs of potential moderation moving forward. While the pace of ongoing rate hikes is certainly an important piece of the puzzle, market participants are also looking for more clues as to what a likely terminal value may be at the end of the cycle. Currently, expectations are hovering around a terminal rate of about 5 percent, but there is plenty more data to be released before that end point comes more clearly into focus. The U.S. Treasury curve was slightly down last week. The 2-year, 5-year, 10-year, and 30-year lost 2 bps (to 4.5 percent), 3 bps (to 3.92 percent), 4 bps (to 3.73 percent), and 12 bps (to 3.76 percent), respectively.

November 21, 2022

General Market News

  • Despite seeing some recent data that potentially points to a slowing pace of inflation, there is still tightening to be done. Core Consumer Price Index (CPI) data for October increased 0.3 percent month-over-month, but Federal Reserve (Fed) officials have indicated that this better-than-expected result should not be seen as a sign that the inflation fight is over. St. Louis Fed President James Bullard noted, “Thus far, the change in monetary policy stance appears to have had only limited effects on observed inflation . . .” He went on to say, “ To attain a sufficiently restrictive level, the policy rate will need to be increased further.” The U.S. Treasury curve twisted slightly last week. The 2-year and 5-year gained 17 basis points (bps) (to 4.5 percent) and 4 bps (to 3.98 percent), respectively. The 10-year and 30-year fell 2 bps (to 3.79 percent) and 13 bps (to 3.89 percent), respectively.

November 14, 2022

General Market News

  • The Consumer Price Index (CPI) surprised markets last week with headline—which rose 0.4 percent month-over-month against an expected 0.6 percent gain—and core—which rose 0.3 percent month-over-month (excluding food and energy) against an expected 0.5 percent gain—numbers. These results were driven by a decline in prices for used vehicles, commodities, and medical care. The bond market rallied heavily on the news. The 2-year, 5-year, 10-year, and 30-year fell 24 basis points (bps) (to 4.42 percent),33 bps (to 4 percent), 29 bps (to 3.87 percent), and 19 bps (to 4.06 percent), respectively.

November 7, 2022

General Market News

  • Last Wednesday brought the Federal Open Market Committee (FOMC)’s latest rate decision where it hiked the policy rate by 75 basis points (bps) for the fourth consecutive time. This brought the upper target of the central bank’s rate up to 4 percent for the first time since January of 2008 during the global financial crisis. As for the future path of the central bank’s policy rate, Federal Reserve (Fed) Chair Powell left room for flexibility but indicated that the Fed “will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments.” While this might hint at a transition to a smaller rate hike in December, Powell went on to reiterate the “higher for longer” narrative that’s been developing, saying, “We still have some ways to go and incoming data since our last meeting suggests that the ultimate level of interest rates will be higher than previously expected.” U.S. Treasury yields were up across the curve last week. The 2-year, 5-year, 10-year, and 30-year gained 33 bps (to 4.75 percent), 19 bps (to 4.38 percent), 14 bps (to 4.16 percent), and 4 bps (to 4.19 percent).

October 31, 2022

General Market News

  • With the Federal Open Market Committee (FOMC) heading into its November meeting this week, consensus expectations point to a likely rate hike of 75 basis points (bps). As rates continue rising, we’re starting to see more market participants voice their concern that the Federal Reserve (Fed) may be going too far and/or too fast. Fed Chair Jerome Powell has seen an uptick in political pressure with calls to ease up on hikes, but hasn’t revealed any signs of bending as he aims to maintain the independence of the central bank and bring inflation down considerably. His words will be closely monitored at the post-meeting press conference on Wednesday, looking for indications of how the rate path may progress from there. U.S. Treasury yields were down across the curve last week. The 2-year, 5-year, 10-year, and 30-year dropped 25 bps (to 4.27 percent), 32 bps (to 4.16 percent), 21 bps (to 4.01 percent), and 21 bps (to 4.13 percent), respectively.

October 24, 2022

General Market News

  • With the labor market remaining tight and inflation proving stickier than expected, the Federal Open Market Committee (FOMC) heads toward its final two meetings this year with expectations for additional rate hikes of 75 basis points (bps). A December hike of 50 bps is also being discussed among market participants as a possible move. “We are going to keep raising rates for a while,” said Philadelphia Fed President Patrick Harker. “Given our frankly disappointing lack of progress on curtailing inflation, I expect we will be well above 4 percent by the end of the year.” He added: “Sometime next year, we are going to stop hiking rates. At that point, I think we should hold a restrictive rate for a while to let monetary policy do its work.” U.S. Treasury yields were up across the curve last week. The 2-year gained 12 bps to 4.62 percent, the 5-year rose 21 bps to 4.48 percent, the 10-year grew 28 bps to 4.3 percent, and the 30-year yield increased 32 bps to 4.32 percent. 

October 17, 2022

General Market News

  • The front end of the yield curve continued its rise last week, lifted by hotter-than-expected inflationary data. The inversion between the 2- and 10-year U.S. Treasury yields expanded to 50 basis points (bps) and the spread picked up another 8 bps between the two yields. The inversion reflects the Federal Reserve (Fed)’s efforts to cool near-term demand and the economy by raising the shorter-term debt beyond longer-dated debt. The 2-, 5-, 10-, and 30-year Treasuries moved 20 bps (to a 4.50 yield level), 13 bps (to a 4.27 yield level), 12 bps (to a 4.01 yield level), and 13 bps (to a 3.98 yield level), respectively.

October 10, 2022

General Market News

  • The September employment report showed 263,000 jobs added during the month, which helped drive the unemployment rate down to 3.5 percent. This development further supports the Federal Reserve (Fed)'s trend of outsized interest rate hikes, as a higher unemployment rate is likely required to see meaningful cooling of inflation. As we approach the Fed’s November 1–2 meeting, the debate continues between those who think more must be done to fight stubbornly high inflation and those who think rates may be increasing too quickly for the economy to handle. The aforementioned employment report likely bodes well for the Fed to continue their aggressive rate path. Along with many other Fed officials, Fed Governor Lisa Cook acknowledges the relevance of both arguments. “Although lowering inflation will bring some pain, a failure to restore price stability would make it much harder and much more painful to restore it in the future,” said Cook. “It is critical that we prevent an inflationary psychology from taking hold.” The yield curve saw some movement over the course of last week but finished roughly where it started. The 2-year, 5-year, 10-year, and 30-year landed at 4.31 percent (up 10 bps), 4.15 percent (up 11 bps), (up 9 bps), and 3.85 percent (up 9 bps), respectively.

October 3, 2022

General Market News

  • The economy continues to show signs of strength—consumer confidence, new home sales, and personal spending all surprised to the upside last week—while the Federal Reserve (Fed) actively tries to cool inflation. This Friday's release of September employment data will be another important piece of that puzzle for the Fed leading up to its next rate decision in early November. Based on the Federal Open Market Committee (FOMC) dot plot released after the most recent meeting, all but one committee member expects the terminal policy rate to rise above 4 percent and some members have expressed concerns about potentially going too far—and too quickly. Chicago Fed President Charles Evans was apprehensive about the pace, saying, “There are lags in monetary policy and we have moved expeditiously. We have done three 75 basis point (bp) increases in a row and there is talk of more to get to that 4.25 percent to 4.5 percent by the end of the year. You’re not leaving much time to sort of look at each monthly release.” The U.S. Treasury yield curve shifted moderately last week. The 2-year, 5-year, and 10-year fell 18 bps (to 4.16 percent), 23 bps (to 3.96 percent), and 1 bp (to 3.71 percent), respectively. The 30-year gained 2 bps (to 3.66 percent).

September 26, 2022

General Market News

  • On Wednesday, the Federal Open Market Committee (FOMC) interest rate decision from the September 21–22 meeting was announced. The committee hiked the policy rate by 75 basis points (bps), bringing the upper limit of the target federal funds rate to 3.25 percent, which hasn't been breached since early 2008. This is the third consecutive rate increase of 75 bps as the Federal Reserve (Fed) continues its fight against inflation. The action was widely expected by markets and economists as the latest Consumer Price Index (CPI) report for August showed stubbornly high consumer prices, supporting the continuation of hawkish monetary policy. The FOMC's dot plot of members' future rate expectations was also released on Wednesday, showing nearly all committee members expect the central bank's rate to reach somewhere in the range of 4–4.5 percent by the end of 2022. Fed Chairman Jerome Powell has been setting the expectation that there is plenty more economic discomfort to endure before its job is complete, saying "We have got to get inflation behind us. I wish there were a painless way to do that. There isn’t."  U.S. Treasury yields were up across the curve last week. The 2-year, 5-year, 10-year, and 30-year rose 34 bps (to 4.21 percent), 37 bps (to 4 percent), 31 bps (to 3.76 percent), and 14 bps (to 3.66 percent), respectively.

September 19, 2022

General Market News

  • Last week came with the release of hotter-than-expected August inflation data. The Consumer Price Index (CPI) saw an increase of 0.1 percent against expectations for a decrease of that amount. Core inflation, which strips out volatile food and energy prices, increased 0.6 percent against expectations for 0.3 percent. We await the Federal Reserve (Fed)’s next rate decision at the Federal Open Market Committee (FOMC) meeting this week, where the central bank is expected to raise the federal funds rate by 75 basis points (bps). This would bring the upper target to 3.25 percent and mark the third consecutive rate increase of that amount as the Fed aims to tame inflation. U.S. Treasury yields were up across the curve last week. The 2-year, 5-year, 10-year, and 30-year rose 33 bps (to 3.89 percent), 22 bps (to 3.66 percent), 14 bps (to 3.45 percent), and 3 bps (to 3.48 percent), respectively.

September 12, 2022

General Market News

  • As the Federal Open Market Committee (FOMC) enters its quiet period leading up to the September 20–21 meeting, market participants are under the impression that the most likely outcome will be a 75 basis point (bp) hike in the Federal Reserve (Fed)’s policy rate. Fed Chair Jerome Powell seemed to support that expectation in an appearance last Thursday when he reiterated his hawkish stance and gave no indication that such expectations were unreasonable. “It is very much our view, and my view, that we need to act now forthrightly, strongly, as we have been doing, and we need to keep at it until the job is done.” Powell went on to say, “the longer inflation remains well above target, the greater the risk the public does begin to see higher inflation as the norm and that has the capacity to really raise the costs of getting inflation down”. Powell is not alone as other Fed officials have been sharing similar messages and signaling apparent support for a third consecutive increase of 75 bps. U.S. Treasury yields were up across the curve last week. The 2-year, 5-year, 10-year, and 30-year rose 10 bps (to 3.49 percent), 9 bps (to 3.38 percent), 8 bps (to 3.27 percent), and 10 bps (to 3.45 percent), respectively.

September 6, 2022

General Market News

  • Following hawkish messaging from the Federal Reserve (Fed)’s economic symposium at the end of August, market participants look toward the next rate decision set to take place on September 21. Current conditions point to a fairly even split between expectations for an increase of 50 and 75 basis points (bps). Recent employment data has been encouraging and lends some flexibility and support for hawkish moves in the coming months. Although the preliminary results for August show a small increase in the unemployment rate to 3.7 percent, that rate is still in a comfortable spot and was accompanied by a strong month of 315,000 jobs added. Initial jobless claims also fell in the final week of August, pointing to a labor market that remains tight—even in the midst of relatively weak economic growth. U.S. Treasury yields were up across the curve last week. The 2-year, 5-year, 10-year, and 30-year rose 8 bp (to 3.48 percent), 17 bps (to 3.38 percent), 21 bps (to 3.25 percent), and 18 bps (to 3.37 percent), respectively.

August 29, 2022

General Market News

  • Although August is an off month for Federal Open Market Committee (FOMC) meetings, Federal Reserve (Fed) Chair Jerome Powell still had an opportunity to provide forward guidance and steer the markets through his much-anticipated appearance at the annual Economic Symposium in Jackson Hole, WY last week. Powell took a strongly hawkish tone; he made it clear that more rate hikes are coming and fighting inflation is his top priority despite the pain that many households will likely experience as a result. This comes as the Chicago Fed's National Financial Conditions Index (NFCI) pointed to loosening economic conditions in most of July and August, which is a trend the Fed is eager to put into reverse—especially after already hiking rates by a historic 75 basis points (bps) at the past two FOMC meetings. From here, markets will look toward the Fed's September meeting for the next rate hike and additional economic guidance as we near the final quarter of 2022. U.S. Treasury yields were up across the curve last week. The 2-year, 5-year, 10-year, and 30-year rose 9 bps (to 3.38 percent), 8 bps (to 3.19 percent), 11 bps (to 3.07 percent), and 8 bps (to 3.28 percent), respectively.

August 22, 2022

General Market News

  • Without a Federal Open Market Committee (FOMC) meeting in August, the Federal Reserve (Fed) will likely rely on this week's Economic Policy Symposium in Jackson Hole, Wyoming, as an opportunity to bolster its message and reiterate a hawkish stance in an attempt to further tighten economic conditions. Regarding the next rate decision in September, Fed Bank of St. Louis President Jim Bullard commented, “We should continue to move expeditiously to a level of the policy rate that will put significant downward pressure on inflation” and “I don’t really see why you want to drag out interest rate increases into next year.” Bullard went on to say, “I would lean toward the 75 basis points (bps) at this point.” The U.S. Treasury yield curve was up last week, with the 2-year, 5-year, 10-year, and 30-year up 4 bps (to 3.29 percent), 15 bps (to 3.11 percent), 13 bps (to 2.96 percent), and 9 bps (to 3.2 percent), respectively.

August 15, 2022

General Market News

  • Last week’s inflation reports showed encouraging signs of softening, but the Federal Reserve (Fed) is still far from out of the woods and is looking for much stronger signs of moderation. For July, the Producer Price Index (PPI) fell 0.5 percent (against market estimates of a 0.2 percent increase) and the Consumer Price Index (CPI) showed a price increase of 8.5 percent on a headline basis (against market estimates of an 8.7 percent increase). Despite these mildly positive signs, there is still plenty of work to be done and many market participants expect the Fed to consider a 50 or 75 basis point (bp) rate hike at the September FOMC meeting. The U.S. Treasury yield curve saw modest changes last week. The 2-year and 30-year fell 1 bp (to 3.2 percent) and 3 bps (to 3.13 percent), respectively, while the 5-year and 10-year rose 6 bps (to 2.97 percent) and 8 bps (to 2.86 percent), respectively.

August 8, 2022

General Market News

  • After the Federal Reserve (Fed)’s second consecutive 75 basis point (bp) rate hike on July 27, all eyes now look toward the September Federal Open Market Committee (FOMC) meeting. With inflation remaining near 40-year highs, the markets and Fed officials are expecting continued rate hikes through year-end. St. Louis Fed President James Bullard expressed his expectations for another 1.5 percent of rate increases for the year. “I think we’ll probably have to be higher for longer in order to get the evidence we need to see that inflation is actually turning around on all dimensions and in a convincing way coming lower, not just a tick lower here and there,” Bullard explained. Last Friday’s job report supports ongoing hikes. The U.S. saw a robust rise in nonfarm payroll of 528,000 jobs in July—compared to 250,000 jobs expected—and the unemployment rate edged down to 3.5 percent. The U.S. Treasury yield curve was up across most maturities last week. The 2-year, 5-year, and 10-year rose 17 bps (to 3.06 percent), 12 bps (to 2.8 percent), and 5 bps (to 2.7 percent), respectively, while the 30-year fell 3 bps (to 2.98 percent).

August 1, 2022

General Market News

  • The Federal Reserve (Fed) raised interest rates by another 75 basis points (bps) at last week's FOMC meeting, bringing its target range to 2.25 percent to 2.50 percent. Inflation remains stubbornly high and conversation among market participants is becoming increasingly focused on the timing—rather than the likelihood—of a potential recession. Some believe the U.S. may already be in a recession after seeing two quarters of economic contraction as measured by gross domestic product (GDP). Others, including Fed Bank of Atlanta President Raphael Bostic, maintain hope that such a development can still be avoided if the job market remains robust. “I don’t think the country is in a recession,” Mr. Bostic said on NPR. “One of the things that I’ve been encouraged by is actually how strong the job growth has been, which suggests to me there’s a lot of momentum in the economy.” He added, “There’s a lot of demand out there, and so I think we’re a ways away from a recession.” The U.S. Treasury yield curve saw some inversion last week. Treasury yields fell on the short to intermediate end of the curve with the 2-year, 5-year, and 10-year down 6 bps (to 3 percent), 11 bps (to 2.73 percent), and 4 bps (to 2.71 percent), respectively. The 30-year, however, was up 8 bps (to 3.06 percent).

July 25, 2022

General Market News

  • U.S. Treasury yields were down last week as expectations of a recession and a potential slowdown in rate increases from the Federal Reserve (Fed) were reflected in fixed income markets. Economic data releases suggested a slowing of the global economy. The housing sector showed signs of softening with the North American Homebuilders Index, housing starts, and existing home sales all coming in lower than expected. Initial jobless claims picked up; both Europe and the U.S. Purchasing Managers Index fell below 50, indicating expectations of economic contraction. The 2-year, 5-year, 10-year, and 30-year fell 15 basis points (bps) (to 2.99 percent), 18 bps (to 2.87 percent), 15 bps (to 2.78 percent), and 10 bps (to 3 percent), respectively.

July 18, 2022

General Market News

  • Last Wednesday, U.S. inflation numbers for the month of June were released and the Consumer Price Index (CPI) report exceeded expectations with an increase of 9.1 percent year-over-year. This upside surprise in prices is keeping the Federal Reserve (Fed) on its toes in advance of its July 26–27 meeting; some market participants are expecting the Federal Open Market Committee (FOMC) to increase rates by a full percentage point, while other Fed officials are trying to reign in those expectations. Fed Governor Christopher Waller currently believes a 75 basis point (bp) hike is the right move. “You don’t want to overdo the rate hikes. A 75 [bps] hike, folks, is huge,” Waller explained. “Don’t think because you’re not going 100, you’re not doing your job.” Waller didn’t rule out a 100 bps increase if last month’s remaining economic data announcements point him down that path, but that is yet to be seen. This week will bring numerous data releases related to housing, a significant component of inflation, so there is still much that could develop prior to next week's Fed meeting. U.S. Treasury yields were down modestly last week; the 2-year, 5-year, 10-year, and 30-year fell 1 bp (to 3.10 percent), 9 bps (to 3.04 percent), 15 bps (to 2.93 percent), and 16 bps (to 3.09 percent), respectively.

July 11, 2022

General Market News

  • Following last week’s release of the Federal Reserve (Fed)’s June meeting minutes, all eyes now turn toward the July meeting. With core inflation remaining stubbornly higher than the Federal Open Market Committee (FOMC) would like, another large rate increase could be in the cards. Two Fed officials, Fed Governor Christopher Waller and St. Louis Fed President James Bullard, have already signaled support for a 75 basis point (bp) hike in July. “Inflation is just too high and doesn’t seem to be coming down,” said Waller in a recent webinar. “We need to move to a much more restrictive setting in terms of interest rates . . . and we need to do that as quickly as possible.” After a speech at the Little Rock Regional Chamber in Arkansas, Bullard told reporters , “it would make a lot of sense to go with 75 bps at this juncture,” which would bring the Fed’s target range to 2.25–2.5 percent. U.S. Treasury yields were up across the curve last week. The 2-year, 5-year, 10-year, and 30-year rose 17 bps (to 3.01 percent), 14 bps (to 3.02 percent), 10 bps (to 2.98 percent), and 6 bps (to 3.17 percent), respectively.

July 5, 2022

General Market News

  • The balancing act continues following the 75 basis point (bp) interest rate hike at the 6/14–6/15 Federal Open Market Committee (FOMC) meeting. The Federal Reserve (Fed) aims to bring inflation closer to its 2 percent target without sending the country into a recession. Some analysts and economists are speculating that the U.S. may already be in a recession, so second-quarter gross domestic product (GDP) data will be closely watched as advanced estimates are released later this month. Market participants are also anticipating this Wednesday's release of the Fed's June meeting minutes, which will not only shed light on the discussions surrounding last month’s outsized rate hike, but may also offer some insight into the potential paths for monetary policy moving forward. U.S. Treasury yields were down across the curve last week. The 2-year, 5-year, 10-year, and 30-year dropped 28 bps (to 2.83 percent), 34 bps (to 2.89 percent), 23 bps (to 2.91 percent), and 13 bps (to 3.13 percent), respectively.

June 13, 2022

General Market News

  • The U.S. Department of Labor released its May inflation numbers last Friday. The Consumer Price Index (CPI) report showed that inflation increased 8.6 percent year-over-year, coming in above analyst expectations for an 8.3 percent increase. The FOMC has been closely watching CPI for any signs of cooling inflation as we approach the 6/14–6/15 meeting, and it’s likely concerned that the numbers remain frustratingly elevated. This latest report certainly bolsters expectations for consecutive 50 basis point (bp) rate hikes at the next two meetings. It also perpetuates worries about the Federal Reserve (Fed)’s ability to engineer a soft landing as inflation persists and economic growth expectations slow. U.S. Treasury yields were up across the curve last week. The 2-year, 5-year, 10-year, and 30-year rose 15 bps (to 2.81 percent), 13 bps (to 3.07 percent), 10 bps (to 3.04 percent), and 8 bps (to 3.17 percent), respectively.

June 6, 2022

General Market News

  • The U.S. Department of Labor reported that employers added 390,000 jobs in May. At the same time, the unemployment rate remained flat at 3.6 percent. These strong employment conditions bolster the Federal Reserve (Fed)'s ability to move forward with aggressively hiking interest rates to hamper inflation. With market conditions and Fed officials' sentiments pointing to support for consecutive 50 basis point (bp) increases at the June and July meetings, focuses now shift to the September meeting and where interest rates are expected to go from there. Speaking on the matter, Fed Bank of Cleveland President Loretta Mester offered her thoughts. “If by the September FOMC meeting the monthly readings on inflation provide compelling evidence that inflation is moving down, then the pace of rate increases could slow. But if inflation has failed to moderate, then a faster pace of rate increases could be necessary,” she said. “The risk of recession has risen, but because underlying aggregate demand momentum and the demand for labor are so strong, a good case can still be made.” The U.S. Treasury yield curve was up last week; the 2-year, 5-year, 10-year, and 30-year rose 15 bps (to 2.73 percent), 19 bps (to 2.91 percent), 17 bps (to 2.91 percent), and 11 bps (to 3.08 percent), respectively.

May 31, 2022

General Market News

  • The Federal Open Market Committee (FOMC)'s most recent meeting minutes were released last Wednesday and provided further support for the market's expectation of back-to-back 50 basis point (bp) rate hikes at the June and July meetings. “Most participants judged that 50 basis point increases in the target range would likely be appropriate at the next couple of meetings,” the minutes said. It was also reiterated that the Federal Reserve (Fed) may have to push interest rates beyond neutral and into restrictive territory to confidently quell inflation, stating that “a restrictive stance of policy may well become appropriate depending on the evolving economic outlook and the risks to the outlook.” This type of open-ended language has been a staple in the Fed's recent guidance as they look to remain nimble, balance its desire to effectively fight inflation, and engineer a soft (or "softish") landing to avoid a recession. Treasury yields were down slightly last week. The 2-, 5-, 10-, and 30-year U.S. Treasury yields fell 4 bps (to 2.48 percent), 1 bp (to 2.71 percent), 3 bps (to 2.75 percent), and 1 bp (to 2.98 percent), respectively.

May 16, 2022

General Market News

  • The U.S. Senate confirmed Federal Reserve (Fed) Chair Jerome Powell to his second term last week as the U.S. continues to grapple with its highest rate of inflation in 40 years. With the FOMC June meeting approaching, incoming economic data will be closely monitored to better gauge potential interest rate paths moving forward. Fed Bank of Cleveland President Loretta Mester indicated her support for continuing an aggressive tightening policy in the coming months. "Given economic conditions, ongoing increases in the Fed funds rate are called for, and unless there are some big surprises, I expect it to be appropriate to raise the policy rate another 50 basis points [bps] at each of our next two meetings.” The U.S. Treasury yield curve saw a modest steepening last week. The 2-year, 5-year, and 10-year U.S. Treasury yields dropped 15 bps (to 2.56 percent), 19 bps (to 2.82 percent), and 7 bps (to 2.85 percent), respectively. The 30-year U.S. Treasury yield remained flat at 3 percent.

May 2, 2022

General Market News

  • As we approach the Federal Reserve (Fed)'s May 3-4 meeting, last week's GDP report for the first quarter of 2022 is a poignant reminder of the fine line the Fed must walk to appropriately balance the risks of continued inflation and the potential for a rate-induced recession. The production decline of 1.4 percent on an annualized basis marks the weakest quarter since spring of 2020 when the Covid-19 pandemic initially kicked off in the United States. Still, the underlying data and strength of consumers and businesses point to continued growth for the U.S.—if supply chain issues continue to ease and the pandemic remains at bay. This fundamental strength is a key focus as the Fed looks for signs that the economy will be able to support a relatively aggressive tightening policy in the months ahead. The U.S. Treasury yield curve experienced some flattening last week. The 2-year and 5-year U.S. Treasury yields were up 10 basis points (bps) and 1bp (to 2.62 percent and 2.84 percent), respectively; the 10-year and 30-year U.S. Treasury yields fell 8 bps and 3 bps (to 2.83 percent and 2.90 percent), respectively.

April 18, 2022

General Market News

  • Inflation increased 8.5 percent year-over-year in March, according to data released last week. Faced with this multidecade high, markets eagerly await the Federal Reserve’s (Fed’s) May meeting to see what’s in store for interest rates and the Fed’s balance sheet. An increasing number of top Fed officials have signaled support for a rate hike of 50 basis points (bps) at the May meeting, and minutes from the central bank’s March meeting point to the addition of an aggressive balance sheet runoff of roughly $100 billion per month. The U.S. Treasury yield curve steepened, with the 2-year down 12 bps to 2.35 percent and the 5-year falling 3 bps to 2.65 percent. The 10-year increased 10 bps to 2.7 percent and the 30-year rose 18 bps to 2.81 percent.

April 11, 2022

General Market News

  • The Federal Reserve (Fed)'s March meeting minutes were released last week and revealed a more hawkish theme, pointing to more aggressive policy moves at future meetings. In addition to quicker interest rate hikes to address the short end of the curve, the Fed also expressed their intent to shrink their balance sheet by $100 billion per month to help elevate the longer end of the curve. U.S. Treasury yields were up across the curve last week. The 2-, 5-, 10-, and 30-year U.S. Treasury yields rose 12 basis points (bps) to 2.46 percent, 25 bps to 2.71 percent, 32 bps to 2.66 percent, and 23 bps to 2.68 percent, respectively.

April 4, 2022

General Market News

  • The U.S. Labor Department's Friday report showed 431,000 jobs added in March, bringing the unemployment rate down to 3.6 percent. With employment numbers continuing to bolster the case for a more aggressive interest rate path moving forward, a rate hike of 50 basis points (bps) at the Federal Reserve (Fed)'s May meeting seems to be gaining momentum. U.S. Treasury yields were relatively stable over the past week with modest movements across the curve. The 2-year yield was up 1 bp to 2.38 percent, the 5-year fell 4 bps to 2.52 percent, the 10-year yield was up 3 bps to 2.4 percent, and the 30-year yield dropped by 4 bps to end the week at 2.5 percent. We saw a temporary inversion of the 10- and 2-year yields, adding to market concerns of a potential recession. Although inverted yield curves have historically preceded recessions, there are varying and unprecedented conditions in today's markets that make the future unpredictable.

March 21, 2022

General Market News

  • The Federal Reserve (Fed) announced a 25 basis point (bps) increase in their target rate after last week's FOMC meeting. This came after an 8:1 vote with St. Louis Fed President James Bullard as the only dissent, stating his case for a 50 bps hike. Fed Chair Jerome Powell signaled an aggressive rate path moving forward but didn’t provide specific expectations to see how economic conditions develop. Aided by the Fed's rate hike, yields were up across the curve last week. The 2-, 5-, 10-, and 30-year U.S. Treasury yields were up 22 bps (1.92 percent), 22 bps (2.15 percent), 18 bps (2.17 percent), and 10 bps (2.47 percent), respectively.

March 14, 2022

General Market News

  • February inflation numbers show a 7.9 percent increase in prices over the past 12 months, marking the fastest Consumer Price Index (CPI) acceleration since 1982 with oil prices adding to the pressure. All eyes will be on the Federal Reserve (Fed) this week as we wait to see what comes out of the March 15-16 meeting. Markets are anticipating a hike in interest rates—around 25 basis points (bps)—based on strong signals from Fed Chair Jerome Powell. Treasury yields rose across the curve last week. The 2-, 5-, 10-, and 30-year Treasury yields increased 17, 20, 15, and 15 bps, respectively.

March 7, 2022

General Market News

  • Yields came down a bit across the U.S. Treasury curve last week. The U.S. 2-year yield was down 5 basis points (bps), ending the week at 1.53 percent, and the 5- and 10-year yields were each down 13 bps to 1.73 percent and 1.84 percent, respectively. The 30-year yield fell 6 bps to finish the week at 2.22 percent. While nothing is set in stone at this time, the messaging is becoming a bit clearer as to what investors should expect for an anticipated interest rate hike at the Federal Reserve (Fed)'s upcoming March 15–16 meeting. Fed Chair Jerome Powell indicated that Russia's invasion of Ukraine will likely add to inflationary pressures and that the Fed will likely raise interest rates by 25 bps.

February 28, 2022

General Market News

  • The U.S. Treasury curve moved very little last week. The 2-year Treasury yield was up 4 basis points (bps), ending the week at 1.62 percent. The 5- and 10-year each rose 1 bp to finish at 1.91 percent and 1.97 percent, respectively, and the 30-year fell 2 bps over to end the week at 2.28 percent. As the world watches the Russian invasion of Ukraine, Federal Reserve (Fed) officials are expected to weigh how the conflict may affect its interest rate policy at its March meeting. Fed governor Christopher Waller recently signaled potential support for a 50-bps hike to begin the tightening cycle, and, more recently, addressed the complications from the situation in eastern Europe. “It is possible,” Waller said, “that the state of the world will be different in the wake of the Ukraine attack, and that may mean that a more modest tightening is appropriate, but that remains to be seen.”

February 22, 2022

General Market News

  • The U.S. Treasury curve saw yields decline modestly on the short end and remained mostly flat on the longer end last week. The 2- and 5-year U.S. Treasury yields were down 11 basis points (bps), ending the week at 1.47 percent and 1.84 percent, respectively. The 10- and 30-year U.S. Treasury yields were down 7 bps (to 1.96 percent) and 1 bp (to 2.3 percent), respectively. On Monday, Federal Reserve (Fed) Governor Michelle Bowman expressed an open mind around the idea of a 50-bps hike. There are still numerous senior Fed officials, however, who are signaling opposition to a half-percentage-point increase. Investors will be on the lookout for more clues and clearer sentiment as the March 15–16 meeting inches closer.

February 14, 2022

General Market News

  • The U.S. Treasury curve saw further flattening last week, increasing on the short end of the curve and remaining relatively flat on the longer end of the curve. The 2- and 10-year U.S. Treasury yields increased 38 and 7 basis points (bps), respectively, while the 30-year U.S. Treasury yields decreased 3 bps. With the most recent inflation numbers coming in higher than anticipated, investors are still navigating the uncertainty of possible interest rate paths moving forward.

February 7, 2022

General Market News

  • The U.S. Treasury yield curve shifted higher last week as economic data moved upward. Friday’s January employment report showed a rise in nonfarm payrolls of 467,000 versus an average economist expectation of 51,000. In addition, November and December payroll numbers were revised to an additional 398,000 and 311,000, respectively. This report came following a warning of potential softness from the White House. As a result, yields moved higher across the curve. The report indicates that the economy is perhaps stronger than initially expected. While the January report commonly has noise related to seasonal effects, it will be important to see if this employment strength continues into February. The 2-, 10-, and 30-year U.S. Treasury yields increased 15.9, 15.2, and 13.8 basis points (bps), respectively.

January 31, 2022

General Market News

  • The U.S. Treasury curve continued to flatten last week. Yields on the front end of the curve moved higher as commentary from the Federal Reserve (Fed) members became more hawkish. Raphael Bostic, president of the Federal Reserve Bank of Atlanta, suggested that a rate hike in March was possible and a 50 basis points (bps) hike may be necessary. The U.S. 2-year Treasury yield opened last Monday at 1.016 percent and closed the week at 1.172 percent. This represents an increase of 15.6 bps for the week. The 10-year Treasury yield increased just 0.9 bps last week, and the 30-year Treasury yield increased 0.2 bps. The reaction following Friday’s January employment report will be one to watch as the Fed anticipates a March rate hike.

January 24, 2022

General Market News

  • U.S. Treasuries underwent a volatile week of trading, as yields opened the week higher and closed with the back end of the curve flatter. The U.S. 2-year Treasury yield opened last Monday at 0.969 percent and reached a high of 1.07 percent on Wednesday before closing the week at 0.993 percent. We saw a similar move in intermediate and long-dated Treasuries, though a more pronounced flattening, from Wednesday through Friday. The 10-year Treasury yield dropped 4.6 basis points (bps) last week, and the 30-year Treasury yield dropped 6.5 bps. All eyes will be on the Federal Reserve (Fed) for indications on adjustments to its asset purchases and rate outlook.

January 18, 2022

General Market News

  • The yield curve saw modest flattening last week. The short end of the curve continued its move higher and the long end of the curve held steady. The U.S. 2-year Treasury yield increased another 9.7 basis points (bps), closing at 0.967 percent. The 10-year Treasury yield increased 0.6 bps while the 30-year Treasury yield actually fell 0.2 bps. This news may indicate that the move in yields is approaching a near-term ceiling as appetite from investors keeps bond yields in check at this level. We will see if this trend continues and expands to the short end of the curve in the future.

January 10, 2022

General Market News

  • The yield curve moved higher across the board last week, and a noticeable shift across all maturities also occurred. The U.S. 2-year Treasury yield opened the week at 0.743 percent and closed 12.7 basis points (bps) higher at 0.870 percent. The U.S. 10-year Treasury yield increased 25.7 bps to 1.769 percent. Finally, the U.S. 30-year Treasury yield moved 21.2 bps higher, closing at 2.117 percent. Higher rates spooked equity market investors as the Federal Reserve’s (Fed’s) meeting minutes indicated it would be more aggressive with raising rates and tapering asset purchases.

January 3, 2022

General Market News

  • The yield curve moved modestly higher last week with a majority of the move taking place on the short end of the curve. The 2-year U.S. Treasury yield opened the week at 0.693 percent and closed the week 4.1 basis points (bps) higher at 0.734 percent. The U.S. 10-year Treasury increased 1.9 bps to 1.513 percent. Finally, the 30-year Treasury was flat, opening and closing at 1.905 percent. The front end of the curve rose as more persistent inflation forced it to reduce its asset purchases at a faster clip, and rates could potentially follow if we continue to see lingering, elevated inflation.

December 20, 2021

General Market News

  • The yield curve moved modestly last week, with slight flattening on the back half as future growth projections continued to come down. The increased rate of tapering by the Federal Open Market Committee on Wednesday did little to surprise bond markets; this doubling was widely expected and the short end of the curve was not impacted by the news. The 2-year yield curve fell 1.3 basis points (bps), closing the week at 0.642 percent. The U.S. 10-year Treasury gave up 8 bps, closing at 1.402 percent. The U.S. 30-year gave up 6.5 bps, closing at 1.817 percent.

December 13, 2021

General Market News

  • The yield curve steepened last week, supported by positive news surrounding the Omicron variant and slightly faster-than-expected inflation data. On the short end of the curve, the U.S. 2-year Treasury saw yields pick up 6.9 basis points (bps) after opening the week at 0.59 percent. The back half of the curve also steepened 20 bps as yields on the 30-year Treasury moved from 1.68 percent to 1.88 percent. The U.S. 10-year Treasury saw a pickup of 13.1 bps.

December 6, 2021

General Market News

  • The yield curve continued to rise on the front end and flatten beyond the 5-year Treasury note last week. Near-term inflationary concerns drove the short end of the curve higher and flattened the back end of the curve due to lower future growth expectations amid concerns from the Omicron variant as well as slower global growth. The 10-year Treasury yield opened last week at 1.482 percent and closed the week at 1.341 percent, a drop of 14.1 basis points (bps). The 30-year opened last week at 1.827 percent and closed at 1.676 percent, falling 15.1 bps. The front end of the curve moved higher following Federal Reserve (Fed) Chair Jerome Powell’s suggestion that the central bank may accelerate its taper. The 2-year rose 8.3 bps over the course of the week, closing at 0.591 percent.

November 29, 2021

General Market News

  • The yield curve, particularly the back end, flattened again last week. The 10-year Treasury yield opened the week at 1.548 percent and closed the week at 1.482 percent, a drop of 6.6 basis points (bps). The 30-year opened at 1.911 percent and fell 8.4 bps to close at 1.827 percent. The front end of the curve saw its recent march higher ease, as the 2-year fell 0.5 bps from last Monday’s open to 0.513 percent.

November 15, 2021

General Market News

  • The yield curve continued to flatten last week as inflationary data lifted the front end of the curve. The 2-year Treasury yield opened last Monday at 0.405 percent and closed the week more than 11 basis points (bps) higher at 0.522 percent. The 10-year increased roughly 13 bps, with yields moving from 1.455 percent to 1.584 percent, and the 30-year rose roughly 7 bps from 1.888 percent to 1.955 percent. The front end of the curve continues to come under pressure as the Federal Reserve (Fed) attempts to separate tapering from rate hikes.

November 8, 2021

General Market News

  • Yields fell across the Treasury curve last week as the Federal Reserve (Fed) announced plans to begin tapering the pace of asset purchases this month. The central bank will cut back on Treasury buying by $10 billion per month. The 10-year fell 8 basis points (bps) week-over-week to open Monday morning at 1.48 percent. The 30-year dropped 5 bps to 1.90 percent, the 20-year fell 7 bps to 1.91 percent, the 2-year was down 6 bps to 0.42 percent, and the 5-year shed 9 bps to 1.08 percent.

November 1, 2021

General Market News

  • The Treasury curve flattened slightly last week as investors geared up for this week’s Federal Reserve (Fed) meeting. The 10-year Treasury yield fell 5 basis points (bps) week-over-week, opening Monday morning at 1.57 percent. The 30-year dropped 12 bps to 1.95 percent, the 20-year fell 7 bps to 1.93 percent, the 2-year rose 6 bps to 0.43 percent, and the 5-year climbed 4 bps to 1.21 percent.

October 25, 2021

General Market News

  • Treasury yields moved higher across the curve last week as equity markets rallied, and Federal Reserve (Fed) Chairman Jerome Powell reiterated that the central bank still plans on tapering asset purchases sooner rather than later. The 10-year yield picked up 6 basis points (bps) week-over-week to open Monday morning at 1.66 percent. The 30- and 20-year yields each climbed about 7 bps to 2.11 percent and 2.01 percent, respectively. The 2-year yield was up 3 bps to 0.42 percent, and the 5-year yield climbed 4 bps to 1.17 percent.

October 18, 2021

General Market News

  • The Treasury curve saw a modest flattening last week as investors searched for direction amid earnings releases and growing inflation fears. The 10-year yield picked up 1 basis point (bp) week-over-week to open Monday morning at 1.62 percent. The 30-year yield fell about 12 bps to 2.05 percent, while the 20-year lost 8 bps to around 2.03 percent. The 2-year yield was up 12 bps to 0.44 percent, and the 5-year yield climbed 11 bps to 1.18 percent.

October 4, 2021

General Market News

  • The Treasury yield curve steepened last week as investors weighed the possibility of longer-term elevated inflation. The 10-year yield was unchanged week-over-week, opening on Monday morning at around 1.48 percent. The 30-year yield rose about 5 basis points (bps) to open at 2.05 percent, while the 20-year yield gained 4 bps to around 1.98 percent. The 2-year yield was unchanged at 0.27 percent, and the 5-year yield lost about 5 bps to 0.94 percent. The 4-week Treasury bills sold off on Friday as investors eye a late October deadline for Congress to raise the debt ceiling.

September 27, 2021

General Market News

  • The Treasury yield curve climbed following last week’s Federal Reserve (Fed) meeting, during which the central bank indicated tapering asset purchases may be warranted before year-end. The 10-year yield was up 17 basis points (bps), opening at 1.48 percent on Monday morning. The 30-year rose 15 bps to 2 percent, the 5-year gained 15 bps to 0.97 percent, and the 2-year was 6 bps higher at 0.28 percent.

September 20, 2021

General Market News

  • The Treasury yield curve flattened on a week-over-week basis as markets sought safety early Monday, following a sharp sell-off in Asia and in anticipation of this week’s Federal Reserve (Fed) meeting. The 10-year yield was down about 1 basis point to 1.32 percent. The 30-year fell about 5 basis points (bps) to 1.86 percent, while the 5-year gained 2 bps to about 0.83 percent and the 2-year was unchanged from last week at 0.20 percent.

September 13, 2021

General Market News

  • Treasury yields saw little movement last week as markets look for direction amid growth concerns and the coming September Federal Reserve (Fed) meeting. The 10-year yield was unchanged from last week, opening at 1.33 percent on Monday morning. The 30-year fell 2 basis points (bps) to 1.91 percent, while the 5-year gained about 2 bps to 0.78 percent and the 2-year was unchanged at 0.20 percent.

September 7, 2021

General Market News

  • Treasury yields moved higher across the curve last week as markets came to grips with a weaker-than-expected August jobs report. The 10-year yield rose about 9 basis points (bps) over the past week to open at 1.37 percent on Monday morning. The 30-year picked up 8 bps to 1.98 percent, the 5-year gained about 5 bps to 0.81 percent, and the 2-year rose a single basis point to 0.20 percent.

August 30, 2021

General Market News

  • The Treasury yield curve steepened modestly last week after Federal Reserve (Fed) Chairman Jerome Powell’s remarks at the Fed’s virtual annual symposium. The 10-year Treasury yield picked up 5 basis points (bps) week-over-week to open at about 1.3 percent on Monday morning. The 2-year fell about 1 bp to around 0.21 percent, the 5-year gained approximately 2 bps to 0.79 percent, and the 30-year was up 5 bps to 1.92 percent. After these muted moves, the markets are looking ahead to the August jobs report.

August 23, 2021

General Market News

  • With investors awaiting the Federal Reserve’s (Fed’s) virtual symposium and Chairman Jerome Powell’s speech this Friday, Treasury yields were mixed across the curve. The 10-year Treasury yield was unchanged week-over-week, opening at 1.26 percent on Monday. The 2-year picked up about 2 basis points (bps) to roughly 0.21 percent, the 5-year gained approximately 3 bps to 0.78 percent, and the 30-year was down 4 bps to about 1.88 percent.

August 16, 2021

General Market News

  • Treasury yields moved slightly lower across the curve last week as July’s Consumer Price Index report matched economist expectations. The 10-year Treasury yield fell 4 basis points (bps) to open Monday at 1.28 percent. The 2-year lost 1 bp to 0.20 percent, the 5-year shed 2 bps to 0.77 percent, and the 30-year was down 3 bps to about 1.9 percent.

August 9, 2021

General Market News

  • Treasury yields moved slightly higher across the curve last week as investors reacted to a better-than-expected July jobs report. The 10-year Treasury yield rose about 9 basis points (bps) to 1.27 percent. The 2-year gained 3 bps to 0.20 percent, the 5-year rose approximately 10 bps to 0.75 percent, and the 30-year picked up 7 bps to about 1.9 percent.

August 2, 2021

General Market News

  • Treasury yields moved slightly lower across the curve week-over-week. The 10-year Treasury yield slid about 7 basis points (bps) to open near 1.21 percent. The 2-year fell roughly 2 bps to 0.17 percent, the 5-year dropped approximately 5 bps to 0.67 percent, and the 30-year shed 5 bps to about 1.89 percent. Investors are in a holding pattern after last week’s Federal Reserve (Fed) meeting, awaiting guidance on impending monetary policy shifts.

July 19, 2021

General Market News

  • Treasury yields rebounded modestly last week before a sharp sell-off cratered yields on Monday morning. The 10-year lost 14 basis points (bps) week-over-week to open at around 1.2 percent, its lowest level since early February of this year. The 30-year shed 15 bps to open around 1.83 percent early Monday. Shorter-dated bonds saw smaller adjustments but still moved lower, as the 5-year yield lost 7 bps to open at about 0.72 percent and the 2-year lost 2 bps to open at around 0.2 percent. The latest moves mark a renewed fear of virus variants and questions about economic growth in the near term.

July 12, 2021

General Market News

  • Treasury yields plunged last week as investors weighed concerns about virus variants and shifting monetary policy and the potential effects on the global recovery. The 10-year yield fell about 13 basis points (bps) week-over-week to open at 1.33 percent on Monday morning. The 5-year yield also fell 13 bps to open at 0.76 percent. The 30-year yield was the next biggest mover, shedding 10 bps to open at 1.96 percent. The 2-year yield fell about 5 bps from 0.26 percent to 0.21 percent.

July 6, 2021

General Market News

  • Yields fell slightly across the Treasury curve last week as the first half of 2021 wrapped up. The 10-year yield fell about 5 basis points (bps) week-over-week to open around 1.41 percent on Monday morning. The 2-year was down 1 bp to 0.26 percent. The 30-year saw the biggest move, shedding 7 bps to open at 2.03 percent. The 5-year was down 2 bps to 0.89 percent. The 10-year has hovered between 1.5 percent and 1.4 percent for the past several months as investors gauge the global recovery and possible policy changes from the Federal Reserve (Fed).

June 21, 2021

General Market News

  • The Treasury curve flattened significantly after last week’s Federal Reserve (Fed) meeting as investors grappled with the central bank’s hawkish forecasts. The 10-year Treasury yield was mostly unchanged Monday morning, opening at 1.44 percent. The 30-year fell 11 basis points (bps) week-over-week, opening at 2.03 percent. Shorter-dated notes sold off sharply as the 5-year gained 18 bps week-over-week, opening at 0.89 percent, and the 2-year rose 8 bps to 0.23 percent.

June 14, 2021

General Market News

  • With future inflation expectations abated and investors returning to bonds, longer-term Treasury yields flattened last week. The 10-year Treasury yield dropped 9.7 basis points (bps) from last week’s open, starting at 1.46 percent Monday morning. The 30-year yield fell 8.5 bps week-over-week, opening at 2.15 percent. On the shorter end of the curve, the 2-year opened at 0.15 percent, up slightly from the previous week.

June 7, 2021

General Market News

  • The yield curve flattened slightly last week as fixed income investors weighed the reopening of the economy against the possibility the Federal Reserve (Fed) will taper its policy later in the year. The 10-year Treasury yield opened the week at 1.58 percent and closed about 2.2 basis points (bps) lower. On Monday morning, the 10-year opened at 1.57 percent, reversing most of last week’s move. The 30-year opened Monday at 2.25 percent, 7.8 bps lower than last week’s open. On the shorter end of the curve, the 2-year Treasury opened at 0.16 percent, 0.6 bps higher than last week’s open.

June 1, 2021

General Market News

  • The yield curve moved modestly lower again last week as the Federal Reserve (Fed) continued its patient monetary policy. The 10-year Treasury yield opened the week at 1.62 percent and closed more than 4 basis points (bps) lower at 1.58 percent. It opened at 1.63 percent on Tuesday morning. The 30-year opened at 2.33 percent, slightly up from last week’s open of 2.32 percent. On the shorter end of the curve, the 2-year opened at 0.15 percent, 0.6 bps below last week’s open.

May 24, 2021

General Market News

  • The yield curve ticked lower on the week as investors digested the most recent inflationary data and debated future inflation expectations. The 10-year Treasury yield opened Monday morning at 1.62 percent, only slightly lower than last week’s open of 1.63 percent. The 30-year yield opened at 2.31 percent, down 4.1 basis points (bps) from last week’s open of 2.35 percent. On the shorter end of the curve, the 2-year opened at 0.16 percent, just 0.6 bps more than last week’s open.

May 17, 2021

General Market News

  • The yield curve moved modestly higher on the week as inflationary data came in above economists’ expectations. The 10-year Treasury yield opened Monday morning slightly higher than 1.64 percent, up from last week’s open of 1.58 percent. The 30-year opened at 2.35 percent, up 7.2 basis points (bps) from last week’s open of 2.28 percent. On the shorter end of the curve, the 2-year opened at 0.15 percent. just 0.6 bps more than last week’s open.

May 10, 2021

General Market News

  • The 10-year Treasury yield opened Monday morning at 1.57 percent, down from last week’s open of 1.63 percent. The 30-year opened at 2.28 percent, down 1.7 basis points (bps) from last week’s open of 2.30 percent. On the shorter end of the curve, the 2-year opened at 0.15 percent—1.3 bps less than last week’s open.

April 19, 2021

General Market News

  • We saw mild flattening of the yield curve last week as longer-dated yields declined. Despite positive economic data, the drop occurred as foreign buyers, particularly from Japan, purchased bonds and drove yields down. The 10-year Treasury yield remained flat, opening the week at 1.66 percent and closing 9 basis points (bps) lower at 1.57 percent. The 10-year opened just shy of 1.61 percent on the 19th, eroding part of last week’s move. The 30-year opened at 2.29 percent, down roughly 5 bps from last week’s open. On the shorter end of the curve, the 2-year Treasury opened at 0.16 percent, increasing just two-tenths of a basis point.

April 12, 2021

General Market News

  • The 10-year Treasury yield remained flat last week. On Monday morning, it opened just one-tenth of a basis point higher than last Monday’s open. The 30-year came in at 2.34 percent on Monday, down just two-tenths of a basis point from last week’s open. On the shorter end of the curve, there was a slight decline in yields after Federal Reserve Chair Jerome Powell’s 60 Minutes interview, in which he stated he expects rates to remain low through 2021. The 2-year opened last week at 0.18 percent and came in at 0.17 percent on Monday morning.

April 5, 2021

General Market News

  • Rates increased modestly last week. The 10-year Treasury yield opened at 1.67 percent and closed at 1.71 percent. On Monday morning, the 30-year opened at 2.35 percent, down from last week’s open of 2.38 percent. On the shorter end of the curve, the 2-year opened last week at 0.14 percent and increased to 0.18 percent on Monday.

March 29, 2021

General Market News

  • Inflation fears have increased recently, and yet inflation remains muted, growing at just 1.4 percent year-over-year, according to the core personal consumption expenditures (PCE) price index. In August, the Federal Reserve agreed to let the PCE price index run hot to get average inflation closer to the targeted 2 percent level, so this data is worth watching. On Monday morning, the 10-year Treasury yield opened at 1.65 percent, a decline of 12 basis points (bps) from last Monday’s open of 1.73 percent. The 30-year yield opened at 2.36 percent, down from last week’s open of 2.44 percent. There was a slight increase on the shorter end of the curve, with the 2-year rising 0.2 bps to Monday’s open of 0.14 percent.

March 22, 2021

General Market News

  • Rates continued to rise last week. On Monday morning, the 10-year Treasury yield opened just below 1.71 percent, an increase of 8.5 basis points from last week’s open of 1.63 percent. The 30-year opened just above 2.41 percent, up from last week’s open of 2.36 percent. Finally, on the shorter end of the curve, the 2-year opened last week at 0.15 percent and remained flat through Monday morning’s open. Despite comments from Federal Reserve (Fed) Chair Jerome Powell, rates did not rise based on inflation concerns. Powell continued to highlight the Fed’s stance of keeping rates low for some time amid uncertainty in its economic forecasts.

March 15, 2021

General Market News

  • Rates moved higher last week but at a more muted pace, with the 10-year Treasury yield opening just shy of 1.58 percent and closing at 1.64 percent, where it remained through Monday’s open. The 30-year yield opened at almost 2.40 percent, up from last week’s open of 2.30 percent. There was a slight increase in yields on the shorter end of the curve as well, with the 2-year opening Monday at 0.15 percent.

March 8, 2021

General Market News

  • Rates continued to rise last week, with the 10-year Treasury yield opening at almost 1.41 percent and closing at 1.59 percent. On Monday morning, the 10-year opened just shy of 1.60 percent, and the 30-year opened at 2.32 percent, up from last week’s open of 2.16 percent. There was a slight increase in yields on the shorter end of the curve as well, with the 2-year yield opening at 0.15 percent. Last week, Federal Reserve (Fed) Chairman Jerome Powell said he expects some transient inflation in the near term. There is a rumor that the Fed may relaunch Operation Twist, which was last launched in 2011 and involved the Fed selling short-term Treasuries and purchasing longer-dated ones to mitigate rising financing costs.

March 1, 2021

General Market News

  • Rates continued to rise last week, with the 5-year Treasury yield increasing 19 basis points (bps). On Monday morning, the 10-year opened just shy of 1.40 percent, which was only 6 bps higher than last week’s open. The 10-year hit a high of 1.61 percent last Thursday, however, which demonstrates the recent volatility in Treasuries. The 30-year opened on Monday at 2.15 percent, up from last week’s open of 2.14 percent. There was a slight increase in yields on the shorter end of the curve as well, with the 2-year hitting a high of 0.19 percent last Thursday.

February 22, 2021

General Market News

  • Rates continued to rise last week, with the 5- and 10-year Treasuries shifting the most. This follows an increase in 10- and 20-year Treasuries the previous week. It’s unknown when or if the short end of the curve will follow with action from the Federal Reserve (Fed), which is committed to driving inflation before raising interest rates. The 10-year Treasury yield opened last week near 1.21 percent, closing just shy of 1.38 percent to end the week. It opened this morning at 1.36 percent, 15 basis points (bps) higher than last week’s open. The 30-year Treasury opened at 2.15 percent, a gain of 14 bps from last week’s open of 2.01 percent. Finally, on the shorter end of the curve, the 2-year Treasury opened last week at 0.11 percent and has remained flat through Monday’s open.

February 16, 2021

General Market News

  • Rates picked up across the yield curve last week, especially with 10- and 20-year Treasury maturities. The primary focus remains on a potential stimulus package and near-term uncertainty with respect to market inflation expectations and future Federal Reserve (Fed) policy. The 10-year Treasury yield opened last week just below 1.17 percent, closing the week at 1.20 percent; it opened at 1.23 percent this morning. The 30-year opened this morning just below 2.03 percent after opening last week at 1.99 percent. On the shorter end of the curve, we saw a slight increase in yields. The 2-year opened last week at 0.105 percent, ticking up to 0.113 percent this morning.

February 8, 2021

General Market News

  • With coronavirus cases continuing to fall globally, we saw significant steepening of the yield curve. The 10-year Treasury yield opened last week at 1.07 percent and closed just below 1.14 percent. This morning, the 10-year opened at 1.18 percent, up 11 basis points (bps) week-over-week. The 30-year opened just shy of 1.98 percent, up 14.5 bps from last week. On the shorter end of the curve, the 2-year opened last week at 0.11 percent and lost less than one-half of a basis point to open this morning.

February 1, 2021

General Market News

  • We saw mixed trading in the fixed income markets last week, with purchases ticking up on the shorter and longer ends of the curve. The 10-year Treasury yield opened last week at 1.09 percent and closed at 1.07 percent. It opened this morning at 1.09 percent. The 30-year opened this morning at 1.84 percent, a gain of 1 basis point from last week’s opening. On the shorter end of the curve, we saw a sizable move; the 2-year opened last week at 0.13 percent and dropped to 0.11 percent at the opening this morning.

January 25, 2021

General Market News

  • There was minimal flattening in the yield curve during the holiday-shortened week. The 10-year Treasury yield opened at 1.09 percent and closed at 1.05 percent. This morning, the 10-year yield opened just below 1.07 percent—a loss of approximately 2 basis points (bps) since last week’s open. The 30-year opened at 1.82 percent, a loss of 2 bps from last week’s open of 1.84. On the shorter end of the curve, the 2-year opened last week at 0.14 percent and lost 1 bp at the opening this morning.

January 19, 2021

General Market News

  • After major steepening last week, there has been little movement in the yield curve. The 10-year Treasury yield opened at 1.12 percent and closed the week at 1.11 percent. This morning, the 10-year yield opened just above 1.10 percent—a loss of approximately 2 basis points (bps). The 30-year opened at 1.85 percent, which was a loss of roughly 2 bps from last week’s open of 1.88 percent. On the shorter end of the curve, the 2-year opened last week at 0.14 percent and added 0.6 bps at the opening this morning. Bond investors seem to be caught in between the Biden team’s $1.9 trillion stimulus proposal and lackluster economic data.

January 11, 2021

General Market News

  • After little movement during the week of New Year’s, we saw significant steepening of the yield curve in the first week of 2021. The 10-year Treasury yield opened at 0.93 percent and closed just shy of 1.11 percent. This morning, the 10-year yield opened just above 1.13 percent—a pickup of 20 basis points (bps) in just one week. The 30-year yield opened at 1.9 percent—a gain of more than 23 bps from last week’s open of 1.66 percent. On the shorter end of the curve, the 2-year opened last week at 0.14 percent and fell just 1.2 bps at the opening this morning. The pickup in yields was predominantly driven by the results of the Georgia runoffs, as two additional senators for the Democratic Party increases the likelihood of additional stimulus.

January 4, 2021

General Market News

  • Last week saw minimal movement in the yield curve due to light trading and the holiday. The 10-year Treasury yield opened at 0.93 percent and closed the week just shy of 0.92 percent. This morning, the 10-year yield opened at almost 0.93 percent. The 30-year opened at 1.66 percent—a loss of less than 1 basis point from last week’s open of 1.67 percent. On the shorter end of the curve, the 2-year opened last week at 0.12 percent and fell just three-tenths of a basis point this morning.

December 21, 2020

General Market News

  • Last week saw a moderate steepening of the yield curve as lawmakers moved closer to a potential stimulus package and the Moderna vaccine was approved. The 10-year Treasury yield opened the week at 0.93 percent and closed just shy of 0.95 percent. This morning, it opened just below 0.90 percent, down 3 basis points (bps) from last week’s open. The 30-year opened this morning at 1.64 percent, a loss of 3 bps from last week’s open of 1.67 percent. On the shorter end of the curve, we saw a sizable move as the 2-year opened last week at 0.121 percent and rose one-fifth of a basis point to 0.123 percent this morning. The bond market signals investors were cautiously optimistic heading into the weekend.

December 14, 2020

General Market News

  • Last week saw a moderate flattening of the yield curve in response to potential stimulus talks, vaccine approval news, and the latest jobs report. The 10-year Treasury yield opened last week near 0.97 percent and ended the week just below 0.89 percent. It opened higher this morning, just shy of 0.92 percent. The 30-year opened this morning at 1.66 percent, a loss of 8 basis points (bps) from last week’s open at 1.74 percent. On the shorter end of the curve, we saw a sizable move as the 2-year opened last week at 0.16 percent and dropped 3 bps to 0.13 percent this morning.

December 7, 2020

General Market News

  • Last week saw a steepening of the yield curve as optimism grew over vaccine news and the potential for new stimulus. The 10-year Treasury yield opened last week just below 0.85 percent and closed just shy of 0.97 percent. This morning, the 10-year opened at 0.94 percent, almost 9 basis points (bps) higher than last week’s open. The 30-year opened this morning at 1.70 percent, an increase of 11 bps over last week. On the shorter end of the curve, the 2-year opened last week at 0.15 percent and dropped to 0.14 this morning.

November 30, 2020

General Market News

  • The holiday-shortened week saw a modest pickup in yields. The 10-year Treasury yield opened at 0.82 percent and closed just shy of 0.88 percent on Wednesday. This morning, the 10-year yield opened at 0.85 percent, up 3 basis points (bps) from last week’s open. The 30-year yield opened just shy of 1.52 percent last week, and it opened at 1.58 percent this morning—a pickup of 6 bps. Finally, on the shorter end of the curve, the 2-year opened at 0.16 percent last week, dropping 1 bp to 0.15 percent this morning.