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WEEKLY MARKET UPDATE

July 15, 2024

Financial Market Data

  • The Russell 2000 led the way last week, gaining more than 6 percent. Softer-than-expected CPI data led to a major rally in small-caps. Softer inflation data supports the likelihood that the Federal Reserve (Fed) will cut interest rates in June. That might start the cycle of easing, which would offer solace to small-cap firms that have struggled with variable rate debt exposure.

July 8, 2024

Financial Market Data

  • Large-cap equities rallied in the holiday-shortened week. The Nasdaq led the way, rising for the fifth consecutive week. Tesla increased more than 27 percent as the company’s second-quarter deliveries were better than expected. Tesla deliveries fell 4.8 percent in the second quarter, but that represented a quarter-over-quarter rebound of 14.8 percent. 

July 1, 2024

Financial Market Data

  • Despite a relatively tepid week in equities there were some larger moves below the surface. Nike (NKE) and Walgreens were both down by more than 20 percent. Nike reported a sales miss, as increased competition and China remain pain points. Both Nike and Walgreens Boots Alliance (WBA) cut guidance. Rivian (RIVN) was up 30 percent on the week, as Volkswagen announced it would invest up to $5 billion in the EV startup. Cruise lines, software, regional banks, and trucking also caught a bounce, as these industries have been under pressure lately on fears of higher for longer rates from the Federal Reserve (Fed).

June 24, 2024

Financial Market Data

  • Value stocks outperformed growth. Nvidia became the largest stock in the world by market capitalization, briefly passing Microsoft before relinquishing the top spot later in the week. This drove down growth stocks, whereas consumer discretionary, energy, and financials were among the top performing sectors. Utilities, technology, and real estate fared worst as home sales continued to soften.

June 17, 2024

Financial Market Data

  • Large-cap U.S. equities led the way yet again, with mega-cap technology names driving the market. Apple continued its tech rally beyond its Worldwide Developer Conference, where it debuted several AI updates. Oracle and Broadcom were also strongly up, rising more than 9.5 percent. Energy, financials, and consumer staples struggled, with falling inflation giving way to concerns about slower growth and lower rates, along with a greater appeal for bonds.

June 10, 2024

Financial Market Data

  • Large-cap U.S. equities moved higher, albeit because of a narrow, technology-led rally. Nvidia rose more than 10 percent, crossing $3 trillion in market capitalization. Small-caps were weak; a hotter-than-expected jobs report lifted rates. Small-caps are more rate sensitive because a larger portion are less profitable and rely on variable rate debt. Mega-cap stocks fared better, carrying S&P 500 performance. Utilities, energy, and materials struggled, whereas technology, health care, and communication services led the way higher. 

June 3, 2024

Financial Market Data

  • U.S equities were mostly lower. Energy, real estate, and utilities were among the top performing sectors. Underperformers included health care, communication services, industrials, and technology. Software stocks were a notable soft spot, with Salesforce, Intuit, ServiceNow, Paycom, and Workday each falling more than 12.9 percent. Salesforce cited a slowdown in the macroeconomic environment and corporate budgets as it just missed revenue estimates at $9.13 billion versus expectations of $9.17 billion, its first top line miss in 18 years.

May 28, 2024

Financial Market Data

  • U.S. equities were mixed, with Nvidia earnings leading semiconductors higher in a narrow rally. Technology and communication services were the lone positive sectors. Energy and real estate each fell more than 3.7 percent; financials and consumer discretionary each lost at least 1.8 percent. The market continued to struggle, with softening data and persistent inflation in pockets of the economy such as shelter, auto insurance, and hospital costs.

May 20, 2024

Financial Market Data

  • U.S. equities were broadly higher. Soft economic data may have strengthened the case for a Fed rate cut this summer or fall. Technology, real estate, and health care were among the top performers. Technology and real estate would benefit from lower rates; their valuations at current rate levels appear elevated from a historical perspective. Industrials, consumer discretionary, and materials were among the worst performers. In a sign of consumer softening, retail sales missed expectations in April.

May 13, 2024

Financial Market Data

  • The market saw a broadening out of this year’s rally as we move deeper into earnings season. Utilities, financials, materials, and consumer staples led the way. Technology, energy, and consumer discretionary were underperformers as investors look to risk-off and higher for longer rate names. JP Morgan Chase (JPM), Costco (COST), and NextEra (NEE) were all up more than 4 percent on the week. The move in Costco came even as April sales missed expectations.

May 6, 2024

Financial Market Data

  • The market took a risk-on approach, with emerging markets, the Russell 2000, and the Nasdaq Composite leading the way. Weaker-than-expected employment data gave the Fed a greater argument to begin cutting interest rates in 2024. As a result, the dollar fell 0.9 percent and growth international equities rallied. The potential for cuts also supported debt-burdened utilities, which fared best among all sectors, followed by consumer discretionary and real estate. Underperforming sectors included energy and financials.

April 29, 2024

Financial Market Data

  • Global equities rebounded after declines in prior weeks. The Nasdaq Composite led the way, with earnings reports from Microsoft and Alphabet helping lift the index higher. Microsoft beat on strong cloud performance. In addition to performing well across cloud, search, and YouTube, Alphabet initiated its first dividend. Finally, Tesla rose more than 14 percent despite missing earnings after displaying a taxi app and discussing the release of a cheaper vehicle. Meta Platforms was down on increased spending ahead.

April 22, 2024

Financial Market Data

  • Global equities were mostly lower. Big technology sold off heavily as the market continued to digest that rate cuts won’t start until later this year or potentially 2025. Geopolitical concerns in the Middle East added to the volatility. Technology was the worst performer, with Nvidia falling more than 13 percent. Utilities, consumer staples, and financials fared better. Netflix fell more than 10 percent after providing softer guidance.

April 15, 2024

Financial Market Data

  • Global equities were lower as hotter-than-expected consumer inflation likely pushed out the Fed’s first rate cut of 2024. These fears were eased the following day, however, when producer inflation came in softer than expected. JPMorgan weighed on the Dow Jones Industrial Average, falling more than 7 percent as the company kept guidance for net interest income in line with prior guidance at $90 billion. (The street had expected a lift of $2 billion–$3 billion for 2024.) Apple fared better, announcing it would have new M4 AI chips for its Mac and iPad lineup.

April 8, 2024

Financial Market Data

  • U.S. equities were lower on the week as a hotter-than-expected ISM Manufacturing and March Employment report puts pressure on the Fed to think twice about a June cut. Fed Chair Jerome Powell seemed to reiterate his comments indicating a potential cut in June, but this was sharply reversed by comments from the head of the Minneapolis Fed, Neel Kashkari, who commented that there was the potential for no rate cuts this year. As a result, health care, real estate, consumer staples, and consumer discretionary stocks all struggled. Energy, communications services, and materials were top-performing sectors.

April 1, 2024

Financial Market Data

  • Small-caps led the way in the last week of the first quarter. The S&P 500 closed higher, marking its fifth consecutive month of gains, whereas the Nasdaq Composite fell slightly. This dynamic will be worth watching as we see if the rally can gain breadth beyond Nvidia, Meta Platforms, and Tesla, which each fell at least 2.9 percent.

March 25, 2024

Financial Market Data

  • The S&P 500 had its best week this year as signals of future rate cuts boosted confidence for equity investors. The potential for rate cuts should reduce the burden on higher-growth businesses that have been facing rising costs of capital with rates at their current levels. Technology, banks, apparel retailers, semiconductors, autos, cruise lines, and home builders were among industries that reacted favorably. Athletic apparel struggled as Lululemon and Nike provided soft guidance.

March 18, 2024

Financial Market Data

  • The Nasdaq Composite fell for the second straight week. The Russell 2000 and small-caps led the way downward. Tesla and Meta Platforms were the primary detractors from the “Magnificent Seven.” Each was down more than 4 percent. Semiconductors and airlines were among other laggards. Airlines were led lower after Southwest said it would cut 2024 capacity amid weakness in leisure spending. Energy, materials, and consumer staples were among the top-performing sectors. West Texas Intermediate crude oil was up more than 4 percent. 

March 11, 2024

Financial Market Data

  • The tech-oriented Nasdaq Composite led the way down, with Apple and Tesla the main drivers.
    Apple was fined $2 billion by the European Union and is under continued scrutiny for how it has
    worked with Epic Games. It was also reported that the company’s iPhone sales in China fell
    24 percent in the first six weeks of the year as consumers shifted to Chinese-based phones
    such as Huawei. Tesla fell more than 13 percent as demand in China waned and suspected
    arson shut down its German factory.

March 4 2024

Financial Market Data

  • Small-caps fared well on the heels of the AI rally. The face of this performance was Super Micro
    Computer, which focuses on AI server solutions. (The Dow Jones announced Super Micro
    Computer would be added to the S&P 500 as part of its quarterly rebalance.) Dell had
    better-than-expected earnings as it benefited from the move to AI-integrated servers. Health
    care, utilities, and staples struggled.

February 26, 2024

Financial Market Data

  • Large-cap equities moved higher, fueled by Nvidia’s earnings announcement after Wednesday’s close. On the earnings call, Nvidia President and CEO Jensen Huang said, “Accelerated computing and generative AI have hit the tipping point.” The company beat revenue and earnings guidance by 7.55 percent and 11.28 percent, respectively. (This came on top of already-lofty expectations of 239.6 percent revenue and 427.3 percent earnings growth.) Consequently, semiconductor stocks were among the top performing industries, along with discount retailers such as Walmart and construction material firms such as Sherwin Williams and Home Depot.

February 20, 2024

Financial Market Data

  • The news of hotter-than-expected inflation in January slowed mega-cap tech stocks for the week. As a result, the S&P 500 and Nasdaq composite both moved lower. Energy was the top-performing sector as concerns around conflict in the Middle East remained high. Financials also performed well as the potential for higher rates could be supportive of net interest margin (spreads between loans issued and interest paid on deposits). Tech, communication services, and consumer discretionary were among the worst-performing sectors for the week despite their recent strength.

February 12, 2024

Financial Market Data

  • The S&P 500 and Nasdaq Composite moved higher for the 14th week in the past 15 as big tech continued to propel the market. Nvidia and Alphabet each rose more than 4.5 percent. Semiconductors, apparel, airlines, and pharmaceuticals were among other solid performers. Regional banks and payment companies, such as New York Community Bank and PayPal, struggled. 

February 5, 2024

Financial Market Data

  • U.S. equities led the way as we received major earnings reports from five firms—Microsoft, Apple, Alphabet, Amazon, and Meta Platforms—from the “Magnificent Seven.” Meta Platforms and Amazon fared particularly well; AI propelled growth at Meta Platforms, whereas Amazon was supported by reacceleration in its AWS cloud business. International and small-caps lagged as the Fed held firm and Chinese equities continued to struggle.

January 30, 2024

Financial Market Data

  • International markets rallied on news that China would lower the amount of money its banks would be required to hold starting on February 5. This was seen as an injection of liquidity into struggling Chinese markets. Stateside, small-caps outperformed as the fourth-quarter GDP report beat estimates and showed easing inflation.

January 22, 2024

Financial Market Data

  • The S&P 500 reached a record high on Friday, closing at 4,839.81. The “Magnificent Seven” (i.e., Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla) were mostly higher. Major chip manufacturer Taiwan Semiconductor surprised to the upside after noting it was normalizing inventory levels and receiving strong demand on the AI side of its business. Nvidia gained more than 8 percent.

January 8, 2024

Financial Market Data

  • The S&P 500 lost 1.5 percent and the Nasdaq Composite tumbled 3.23 percent, snapping a streak of nine consecutive weeks with gains for the indices. Every company in the “Magnificent Seven” (i.e., Apple, Alphabet, Microsoft, Amazon, Meta Platforms, Tesla, and Nvidia) declined. Apple was downgraded by Barclays and Piper Sandler because they anticipate headwinds to phone sales in the first half of 2024.

January 2, 2024

Financial Market Data

  • The S&P 500 and Nasdaq Composite moved higher for the ninth consecutive week. International markets led the way on the potential for continued stimulus from the Chinese government by lowering the required reserve ratio for banks. Over the past nine weeks, small-caps rose more than 24 percent; the S&P 500 increased 16 percent and the Nasdaq grew more than 18 percent over the same timeframe.

December 26, 2023

Financial Market Data

  • The S&P 500 and Nasdaq moved higher for the eighth consecutive week. Small-caps continued to fare well; falling rate expectations provide support for companies that typically have to pay higher rates on debt. The top performing sectors were communications, energy, materials, and health care. Underperforming sectors were utilities, technology, and real estate.

December 18, 2023

Financial Market Data

  • U.S. equities continued their strong rally this week as the Federal Open Market Committee’s dot plot indicated a median expectation of 4.60 percent for the Federal Funds Rate by the end of 2024. This indicates the expectation of at least three rate cuts in 2024. As a result, we saw a broadened rally with small caps in the Russell 2000 leading the charge. The reduction in the fed-funds rate means a reduction in the cost of capital which supports small-cap stocks that usually raise capital at a higher cost then their larger counterparts.

December 11, 2023

Financial Market Data

  • U.S. equities continued their recent gains as Apple, Nvidia, Alphabet, Meta Platforms, and Tesla supported the modest move higher. Communication services, consumer discretionary, and technology were the top performing sectors and were widely supported by the moves from these companies. Energy, materials, and staples fared worst. West Texas Intermediate (WTI) crude oil fell for the seventh consecutive week, losing 3.8 percent but closing above $70 per barrel.

December 4, 2023

Financial Market Data

  • The rally in U.S. equity markets broadened last week, with the Dow Jones and Russell 2000 leading the way. Fed board member Christopher Waller stated that he sees “no reason for rates to remain relatively high” to accomplish the central bank’s goal of 2 percent inflation. As a result, we saw smaller companies and sectors that were pressured by higher rates rally. Real estate was the top performing sector, followed by materials and industrials. Communication services, energy, and technology were the worst performing sectors.

November 27, 2023

Financial Market Data

  • U.S. equity markets moved slightly higher in a light week of trading because of the Thanksgiving holiday. The major news was the release of Nvidia’s earnings on Tuesday. The stock dropped more than 
    3 percent despite beating its sales guidance of $16 billion by 13.3 percent for the quarter and beating earnings expectations of $4.02 per share by 19.3 percent. The company raised its sales guidance for next quarter by 13.7 percent, to $20.4 billion. The underwhelming reaction was attributed to uncertainty around sales to China amid growing U.S. chip export restrictions.

November 20, 2023

Financial Market Data

  • Lower-than-expected consumer and producer inflation reports lifted equities. Small-caps and international markets, two areas that have been hit hard by inflation, were particularly strong. Lower-than-expected inflation data also provided support for the Federal Reserve (Fed) being closer to the end of rate hikes, which should ease currency pressure on international markets. Equities popped to start the week but ended more muted after Walmart’s guidance led to questions regarding the strength of consumers.

November 13, 2023

Financial Market Data

  • U.S. large cap growth continued its rally, whereas small-caps and international markets were more subdued. Despite a weak 30-year auction and rising inflation expectations, mega-cap tech names held up well on the potential for their large cash piles and low interest-bearing debt to continue to act as margins of safety. Energy was the worst performing sector as West Texas Intermediate crude slowed on demand softening. Other struggling sectors were real estate, materials, and health care.

November 6, 2023

Financial Market Data

  • Global markets posted a strong rally amid falling bond yields and the FOMC’s decision to keep the federal funds rate steady at 5.5 percent. The S&P 500 closed the week above its 200-day moving average, which is seen as a support indicator for the index. Earnings continued to broadly beat expectations for the quarter (82 percent, per FactSet). This dynamic, coupled with falling bond yields, helped support areas of the market that have come under pressure, including real estate, financials, consumer discretionary, and technology.

October 30, 2023

Financial Market Data

  • Global markets struggled as bond market volatility and conflict in the Middle East weighed on investors. Earnings were mixed, with UPS and Visa, normally proxies for global shipment and consumer spending, selling off amid volatile macroeconomic conditions and slower payment volumes. Alphabet also saw disappointing cloud results. 

October 23, 2023

Financial Market Data

  • Global markets struggled as rising yields and conflict in the Middle East led investors to take a risk-off approach. Earnings picked up last week, with Tesla and Netflix reporting mixed results. Tesla missed on revenue and earnings because of increased operating expenses. Netflix matched revenue expectations and beat on earnings because its total memberships exceeded expectations. The company also announced price increases for its basic and premium subscriptions.

October 16, 2023

Financial Market Data

  • Emerging market equities outperformed their international counterparts on news that China could let local governments issue special bonds to provide stimulus sooner than expected. The local bonds, if approved by China’s National Congress next week, would begin issuance in January and February. Developed international stocks also responded well to this news because of their higher exposure to China. Since reopening in December 2022, China’s economy has faced problems in the property sector, elevated youth unemployment, and low consumer confidence.

October 9, 2023

Financial Market Data

  • The back end of the yield curve continued its dramatic steepening. The stronger-than-expected employment report on Friday made the case for the continued strength of the U.S. economy, further supporting the back end of the curve. Treasury yields for the 10-year and 30-year rose 21 basis points (bps) and 23 bps, respectively, to close the week at 4.78 percent and 4.94 percent, respectively.

October 2, 2023

Financial Market Data

  • The intermediate-to-long end of the curve continued its climb higher. Between the most recent dot plot from the Fed and the possibility of a higher-for-longer rate hike cycle, persistent inflation fears rose. The potential impact of government shutdowns on rating agencies was also discussed. The 10- and 30-year yields were up 13 bps and 5 bps, respectively, closing at 4.58 percent and 4.71 percent, respectively. The 2-year yield dropped 7 bps to close at 5.05 percent.

September 25, 2023

Financial Market Data

  • Domestic equities struggled as the S&P 500 slipped below its 100-day moving average. The
    higher-for-longer plot from the Fed and negative economic reports weighed on sentiment. The
    Fed’s dot plot was seen as an indication that the central bank has work remaining to get
    inflation under control. Inflation-protected sectors such as health care, utilities, staples, and
    energy fared best. Consumer discretionary, real estate, and materials fared worst as there was
    little appetite for cyclical goods.

September 18, 2023

Financial Market Data

  • Domestic equities posted benign moves last week as we approach the end of the quarter and a likely rate hike pause by the Federal Reserve (Fed). Core CPI surprised to the upside after retail sales came in slightly better than expected and apparel and auto insurance posted higher prices. Used autos also stabilized after showing weakness in July. Despite the retail sales figures, consumer confidence weakened. Fuel costs have begun to rise due to limited refining capacity. The UAW strike hasn’t acted as much of a headwind for Detroit auto stocks. Tesla was up more than 10 percent.

September 11, 2023

Financial Market Data

  • Global equities sold off last week as news of a ban on Apple (AAPL) products for Chinese government employees sent the stock down by six percent. This is particularly important as it’s the largest holding within the S&P 500 Index. Nvidia (NVDA) also struggled as its main manufacturer, Taiwan Semiconductor (TSM), noted that supply constraints on AI chips will take about 18 months to ease. This led to concerns over a backlog at Nvidia (NVDA).

September 5, 2023

Financial Market Data

  • Global equities rallied last week as a drop in Treasury yields following their recent rally helped support growth stocks. The Russell 2000 and Nasdaq Composite were both particularly strong—up more than 3 percent. Technology, energy, and materials were among the top performers as the drop in rates and better-than-expected employment report supported a broader growth story.

August 28, 2023

Financial Market Data

  • The Nasdaq Composite and S&P 500 bounced back last week as Federal Reserve (Fed) Chairman Jerome Powell offered very little to surprise investors at his annual Jackson Hole speech. The Chairman stated that the committee would hike rates, if necessary, but also pointed to signs of continued improvement on inflation. As a result, growth stocks fared well under the belief that the Fed may be done hiking for the cycle, which will set a ceiling on the cost of capital to fund future growth.

August 21, 2023

Financial Market Data

  • Stocks sold off for a third consecutive week as elevated rate concerns continued to loom over equity markets. Additional concerns stemmed from Chinese property developers Country Garden and Evergrande. Country Garden indicated it would post its largest loss since going public 16 years ago as sales have fallen 60 percent from the year prior in July. Evergrande filed for Chapter 15 bankruptcy and is looking to restructure $19 billion of its debt with offshore creditors. The Chinese property sector has historically been a major component of individual wealth and comes in the wake of China’s second lending rate cut since June.

August 14, 2023

Financial Market Data

  • Investors took a risk-off approach as potential for peak rates indicates that the acceleration in the economy may have also peaked. Investors took a risk-off approach last week with technology, materials, and consumer discretionary as the three worst-performing sectors. One exception was energy, which has been supported by West Texas Intermediate crude prices holding above $80 per barrel. Health care was supported by strong earnings reports from Eli Lilly (LLY) and positive clinical data from Novo Nordisk’s Wegovy diabetes and weight loss treatment.

August 7, 2023

Financial Market Data

  • The S&P 500 broke its consecutive weekly gain streak at three. Major earnings reports were mixed last week, with Amazon beating both sales and earnings expectations, driven by 12 percent sales growth at the company’s cloud platform (AWS). Apple beat on both metrics, primarily driven by its services segment as iPhone revenue came in below both expectations and 2022 levels. Technology and emerging markets both pulled back modestly following their recent rally. The top-performing sectors last week were energy, consumer discretionary, and financials.

July 31, 2023

Financial Market Data

  • Earnings from Alphabet (GOOG/GOOGL) and Meta Platforms (META) led equities higher as a
    recovery in advertising demand supported both companies. More than 160 of the S&P 500
    companies reported, with another 170 slated to report in the week ahead. Materials and
    energy also performed well as the Fed issued its potentially final hike of 2023. Utilities and
    real estate struggled; falling inflation may lead investors to seek out bonds for income over
    these dividend-oriented sectors.

July 24, 2023

Financial Market Data

  • Technology stocks took a breather from their recent run, with the Nasdaq Composite falling 0.57 percent last week. Energy, health care, and financials fueled the Dow Jones Industrial Average. Disappointing earnings from Tesla (TSLA) and Netflix (NFLX) weighed on the consumer discretionary and communication service sectors. Strength in the capital markets and deposit growth fueled Morgan Stanley (MS) and Bank of America (BAC) performance, with both rising more than 9 percent.

July 17, 2023

Financial Market Data

  • Equity markets rallied on the back of reports of falling inflation and strong bank earnings. The June Consumer Price Index (CPI) figure came in at three percent, which is the lowest level in more than two years. Additionally, banks such as J.P. Morgan (JPM), Wells Fargo (WFC), and Citigroup (C) all beat earnings as higher rates and continued loan growth led to higher net interest income. International markets benefited from softening in the dollar, and developed and emerging market indices were both up more than four percent as a result.

July 10, 2023

Financial Market Data

  • Equity markets took a breather last week as the June FOMC meeting minutes showed some
    internal conflict regarding whether to continue hiking rates ahead of last month’s decision not
    to do so. The news led investors to believe that additional rate hikes will occur in the second
    half of 2023. This adjustment in expectations saw a mixed sell-off, with health care, materials,
    and tech among the hardest hit. Real estate, utilities, communication services, and consumer
    discretionary were among the top performers.

July 3, 2023

Financial Market Data

  • The S&P 500 led the three major domestic indices. The Nasdaq Composite has been the top performing index year-to-date, and that was also the case in the second quarter. The index is now up more than 30 percent in 2023, with mega-cap names such as Nvidia, Meta Platforms, Tesla, Amazon, Microsoft, Apple, and Alphabet up more than 15 percent this year. The worst performing sectors over the quarter were utilities, energy, consumer staples, and REITs as investors took on more risk and West Texas Intermediate crude oil fell more than 6 percent.

June 26, 2023

Financial Market Data

  • Moves in the Treasury markets were relatively muted last week. There was a slight pickup in the inversion of the yield curve as short-term yields rose slightly and longer-term yields declined. The 2-year rose 3 basis points (bps) to 4.75 percent. The 10-year and 30-year yields each fell 3 bps to close the week at 3.74 and 3.82 percent, respectively.

June 20, 2023

Financial Market Data

  • The S&P 500 posted its fifth straight weekly gain as the Nasdaq posted its eighth straight gain. The market continues its rally as technology and AI-related names such as Nvidia (NVDA) continued to rally. Despite predictions for two more hikes in 2023 after the June pause, the market continued its move higher. We will watch to see how investors digest this meeting over the longer term. Materials, consumer discretionary, and industrials were all top performers last week. Energy, financials, and real estate lagged the broader market rally.

June 12, 2023

Financial Market Data

  • The S&P 500 posted its fourth straight weekly gain and the Nasdaq posted its seventh. The market has continued its rally with the prospect of falling inflation and a potential reacceleration of economic growth. The FOMC will meet on Tuesday and Wednesday to update its rate policy and outlook. If the Federal Reserve (Fed) indicates additional hikes are needed, the decision could take the wind out of the sails of the recent rally. Top-performing sectors last week were consumer discretionary, utilities, energy, and industrials. Technology, consumer staples, and communication services lagged.

June 5, 2023

Financial Market Data

  • The S&P 500 posted its third straight weekly gain as the Nasdaq posted its sixth straight gain—marking a first since January of 2020. The market has continued its rally on better-than-expected earnings and consumer resilience. The move in equities was a tale of periods as value stocks rallied on Friday after a stronger-than-expected employment report gave the Fed more room for potential rate hikes.

May 30, 2023

Financial Market Data

  • The story in equities last week was the earnings from chip manufacturer Nvidia (NVDA). The company known for creating graphics processing units (GPUs) for artificial intelligence (AI), gaming, and automotive beat earnings by 18.5 percent. Even more impressive was that it forecasted sales more than 50 percent higher than estimates at $11 billion for the current quarter. The forecast sent AI, semiconductor, and automotive component stocks higher. The impact of AI on the economy will be a trend to watch in the years to come.

May 22, 2023

Financial Market Data

  • Technology stocks led the way last week as Microsoft (MSFT), Nvidia (NVDA), and Alphabet (GOOGL) all continued their rally as AI continues its push out into the public following the Google I/O event. Financials also fared well amid waning regional bank concerns. JP Morgan Chase (JPM) was up more than 3.7 percent. Sectors that were more challenged included utilities, consumer staples, and real estate, which all showed signs of waning from 2022 levels.

May 15, 2023

Financial Market Data

  • The front end of the curve continued its inversion amid debt ceiling discussions last week. The 1-month yield rose 20 basis points (bps) (to 5.68 percent) while the 3-month yield dropped 6 bps (to 5.22 percent). The 2-year yield also moved up 9 bps (to 4 percent). We saw flattening with the 5-year and 10-year yields, up 4 bps (to 3.45 percent) and 3 bps (to 3.46 percent), respectively. Lastly, the 30-year yield increased 3 bps (to 3.78 percent).

May 8, 2023

Financial Market Data

  • Stocks were mixed last week. The S&P 500 and Dow Jones Industrial Average were down slightly amid continued regional bank concerns. But the Nasdaq Composite, MSCI EAFE, and MSCI Emerging Markets moved higher. The news of a potential pause on rate hikes from the Fed supported tech stocks and international stocks, which provide diversification away from the U.S. economy while it deals with regional bank concerns and elevated short-term rates. Better-than-expected earnings from Apple also supported technology stocks as iPhone sales came in higher than forecasted.  

May 1, 2023

Financial Market Data

  • The front end of the curve continued its recent lift ahead of the May Federal Open Market Committee (FOMC) meeting. The shortest end of the curve rose dramatically with earnings coming in better than expected. The 1-month yield rose 76 basis points (bps) to 4.32 percent, and the 3-month yield rose 5 bps to 5.11 percent. We saw yields continue to fall as the longer-term growth and inflation picture remains more muted. The 2-year and 10-year yields both fell 8 bps, to 4.06 percent and 3.43 percent, respectively. The 30-year yield declined 5 bps, to end the week at 3.68 percent. 

April 24, 2023

Financial Market Data

  • Stocks were slightly down last week with earnings coming in mixed. Bank of America (BAC) rounded up major bank earnings as higher net interest margin and deposits fueled earnings growth. Tesla (TSLA) profitability dropped in the first quarter as margins faced pressure amid dropping vehicle prices and the cost to shift to new battery cells. The buildup in electric vehicle inventory bears watching. Both ASML and Taiwan Semiconductor (TSM) beat earnings expectations in signs of better-than-feared results. Lastly, Procter & Gamble (PG) beat earnings on raised prices. The week ahead will be major for tech earnings.

April 17, 2023

Financial Market Data

  • Value stocks continued their outperformance despite cooling inflationary data by way of the CPI and PPI inflation reports. The main factor in value stocks for the week was earnings from big banks such as JP Morgan (JPM), Wells Fargo (WFC), Citigroup (C), and PNC Financial (PNC). The large banks benefitted from inflows of deposits from smaller regional banks and higher margins driven by rising rates. Investors will keep an eye out for regional bank earnings this week, as well as additional clarity regarding balance sheet health as deposit outflows and commercial real estate have raised concerns.

April 10, 2023

Financial Market Data

  • Communication services, health care, utilities, and energy were among the top performing sectors. West Texas Intermediate crude oil rallied 6.6 percent on the back of the announcement that OPEC+ cut more than 1 million barrels per day. Tesla fell more than 10 percent as sales came in below expectations. Industrials, consumer discretionary, materials, and technology fell amid signs of potentially slowing economic data. The belly, or middle of the curve, between 5- and 10-year Treasury yields led the decline. The better-than-expected employment report saw the short end of the yield curve reverse some of its drop to start the week. The 2-year fell 7 bps to 3.99 percent, the 5-year declined 10 bps to 3.52 percent, the 10-year dropped 8 bps to 3.41 percent, and the 30-year dipped 7 bps to 3.62 percent. Consumer price inflation data, set to be released on Wednesday, will confirm or reverse the rebound in 2-year yields.

April 3, 2023

Financial Market Data

  • Global equities were up across the board last week as markets rose for the third consecutive week to close out the quarter. A lack of news on the regional banking side eased market fears and saw equities move higher. Small caps and value stocks outperformed despite a more challenging month for both than large-cap growth stocks.

March 27, 2023

Financial Market Data

  • Equities rose during a volatile week. Mixed messaging on the banking sector from Powell and Treasury Secretary Janet Yellen resulted in midweek volatility. International stocks fared well as the dollar fell. The European Central Bank raised rates 50 bps on March 16, whereas the Fed chose a 25 bps hike. The dollar index was down 0.6 percent. Mega-cap tech names, such as Apple, Tesla, and Nvidia, rose more than 3 percent. Gold, which increased 0.5 percent, has climbed amid banking concerns.

March 20, 2023

Financial Market Data

  • U.S. Treasury yields fell sharply as investors flocked to fixed income amid the equity volatility. The 
    2-year, 5-year, 10-year, and 30-year fell 74 basis points (bps) (to 3.84 percent), 48 bps (to 
    3.97 percent), 30 bps (to 3.4 percent), and 10 bps (to 3.6 percent), respectively. Future rate 
    expectations fell dramatically last week when rate hikes proved to negatively impact Silicon Valley 
    Bank as its portfolios were highly sensitive to changes in interest rates. The FOMC will meet on 
    Wednesday to decide on short-term rate policy.

March 13, 2023

Financial Market Data

  • Equities sold off last week amid large swings in Federal Reserve (Fed) policy expectations and added volatility from the closure of Silvergate Capital (SI) and Silicon Valley Bank (SIVB). Silvergate was a popular bank for housing assets of many crypto exchanges but faltered as its fixed income assets lost value following the rapid increase in Fed hikes. Silicon Valley Bank was a bank of choice for many venture capital firms and individuals. On Friday, the stock was halted as it announced it failed to find a buyer to raise the capital it needed to offset liabilities and fixed income losses. 

March 6, 2023

General Market News

  • This month marks one year since the Federal Open Market Committee (FOMC) began its unprecedented rate hiking journey and, although the grip has loosened, inflation still has its talons in the U.S. economy. January proved to be a headache for Federal Reserve (Fed) officials as progress on cooling inflation slowed, spending was stronger than expected, and the job market continued to run hot. As we approach the March 22 FOMC rate decision, the question still stands as to how this data will develop and affect policy moving forward. “It could be that progress has stalled, or it is possible that the numbers released last month were a blip, perhaps associated with unusually favorable weather, and that forthcoming data will show that economic activity and inflation resumed their decline” explained Fed Governor Chris Waller. “On the other hand, if those data reports continue to come in too hot, the policy target range will have to be raised this year even more to ensure that we do not lose the momentum that was in place before the data for January were released.” U.S. Treasury yields saw modest increases last week. The 2-year, 5-year, 10-year, and 30-year gained 6 basis points (bps) (to 4.88 percent), 7 bps (to 4.29 percent), 7 bps (to 4.02 percent), and 3 bps (to 3.96 percent), respectively. 

February 27, 2023

General Market News

  • The minutes from the February Federal Open Market Committee (FOMC) meeting were released last week and didn’t produce any big surprises. They indicated that, although price increases are slowing, inflation remains well above what the Federal Reserve (Fed) is comfortable with. The February 1 interest rate hike of 25 basis points (bps) received unanimous support from voting members, but the meeting notes show that multiple members were interested in a more aggressive rate change. While the call for a quarter percent increase prevailed, that meeting took place before multiple key releases, including January’s blockbuster jobs report, a falling unemployment rate, rebounding retail sales, and hotter-than-expected consumer prices. These economic developments—and those still to come before the next rate decision—will play a large role in the Fed’s March policy decisions. U.S. Treasury yields saw modest movements last week. The 2-year, 5-year, 10-year, and 30-year gained 4 bps (to 4.74 percent), 5 bps (to 4.16 percent), 10 bps (to 3.92 percent), and 3 bps (to 3.9 percent), respectively.

February 21, 2023

General Market News

  • The next Federal Open Market Committee (FOMC) rate decision is roughly one month away (March 22), and market participants will pay close attention to economic releases between now and then. Recent indicators point to an energetic economy in the U.S., leading to questions about where the Federal Reserve (Fed) will take rates from here. With the unemployment rate resting at a 53-year low, retail sales showing resilience and notching their biggest monthly gain in nearly two years, and January’s inflation numbers showing a bit more heat than expected, conditions seem supportive of further rate hikes. Although current market pricing largely shows the expectation for a 25 basis point (bps) hike in March, strong economic reports have led markets to price in a growing likelihood of a 50 bps hike. U.S. Treasury yields rose across the curve last week. The 2-year gained 17 bps to 4.69 percent, the 5-year grew 19 bps to 4.11 percent, the 10-year added 4 bps to 3.7 percent, and the 30-year increased 8 bps to 3.82 percent.

February 13, 2023

General Market News

  • Rates continued their move higher last week as several Federal Reserve (Fed) members, including Chairs Powell, Kashkari, and Waller indicated there was potentially “more work to do.” U.S. Treasury yields were up last week, with the 2-year, 10-year, and 30-year increasing 42 basis points (bps) (to 4.51 percent), 34 bps (to 3.74 percent), and 30 bps (to 3.82 percent), respectively.

February 6, 2023

General Market News

  • The Federal Reserve (Fed) increased its policy rate by 25 basis points (bps) at last week’s Federal Open Market Committee (FOMC) meeting, bringing the target range between 4.5 and 4.75 percent. This marks a slowdown in pace for the Fed’s rate hikes, but Chairman Jerome Powell aimed to avoid giving any indication that the job was close to done. “Inflation data received over the past three months shows a welcome reduction in the monthly pace of increases,” Powell said in his post-meeting press conference. “And while recent developments are encouraging, we will need substantially more evidence to be confident that inflation is on a sustained downward path.” While acknowledging that, “We can now say, I think for the first time, that the disinflationary process has started,” he went on to note that it would be “very premature to declare victory or to think we really got this.” U.S. Treasury yields changed modestly over last week. The 2-year and 5-year gained 2 bps to (4.2 percent) and 6 bps (to 3.66 percent), respectively. The 10-year and 30-year fell 12 bps (to 3.39 percent), and 8 bps (to 3.54 percent).

January 30, 2023

General Market News

  • The future path of interest rates is uncertain for 2023, but according to Bloomberg’s economic forecast, the average Bloomberg surveyed economist expects to see another half percent of increases in the first quarter of the year before levels remain stable through the second and third quarters. The Federal Reserve (Fed) is scheduled to announce its next rate decision this week, on Wednesday, February 1. Consensus expectations are pointing to a 25 basis point (bp) increase. Some analysts, however, aren’t ruling out a more hawkish 50 bps hike as recent indicators have shown easing financial conditions and softening inflation. Fed Chair Powell’s post-meeting press conference will be closely monitored for forward guidance to get a better sense of how high rates are expected to go and for how long. Since markets have been pricing in 2023 rate cuts despite Fed officials' rebukes of such expectations, Powell will likely tread carefully and avoid giving any signals that the Federal Open Market Committee’s (FOMC) foot may come off the inflation-fighting pedal anytime soon. U.S. Treasury yields were up modestly last week. The 2-year, 5-year, 10-year, and 30-year gained 6 bps (to 4.21 percent), 11 bps (to 3.64 percent), 7 bps (to 3.55 percent), and 2 bps (to 3.68 percent), respectively.

January 23, 2023

General Market News

  • As the Federal Open Market Committee (FOMC) enters the quiet period leading up to its next policy meeting (January 31–February 1), the average Bloomberg surveyed economist expects to see another half percent of increases in the first quarter before levels remain stable through the second and third quarters. Inflation data has shown recent signs of softening, but Federal Reserve (Fed) officials will require more convincing signs before there are any serious conversations about stopping its cycle. Fed Governor Lael Brainard explained, “Even with recent moderation, inflation remains high, and policy will need to be sufficiently restrictive for some time to make sure inflation returns to 2 percent on a sustained basis.” Still, as we approach the February 1 FOMC rate decision, futures markets are confidently pricing in a smaller hike of 25 basis points (bps). This marks a significant downshift after a string of four 75 bps hikes and one 50 bps hike in 2022. Speaking to the possibility of a quarter percentage point hike, Brainard noted, “This will enable us to assess more data as we move the policy rate closer to a sufficiently restrictive level, taking into account the risks around our dual-mandate goals.” U.S. Treasury yields didn’t see much movement last week. The 2-, 5-, and 10-year were down 7 bps, to 4.17 percent, 3.54 percent, and 3.44 percent, respectively. The 30-year ended 1 bp lower at 3.6 percent.

January 17, 2023

General Market News

  • The future path of interest rates is uncertain for 2023, but the average Bloomberg surveyed economist expects to see another half percent of increases in the first quarter before levels remain stable through the second and third quarters. Last week’s release of December Consumer Price Index (CPI) data—coming down 0.1 percent, in line with expectations—showed that consumer prices continue to moderate. Signs of softening prices may bolster the case for the Federal Reserve (Fed) to reduce the size of its February 1 rate hike to 25 basis points (bps), but a 50 bps hike is still on the table. Market participants will be looking for signs that more convincingly point one way or the other. U.S. Treasury yields were down across the curve last week. The 2-year, 5-year, 10-year, and 30-year fell 9 bps (to 4.16 percent), 13 bps (to 3.27 percent), 8 bps (to 3.48 percent), and 7 bps (to 3.62 percent), respectively.

January 9, 2023

General Market News

  • The Federal Reserve (Fed) may feel that it has been receiving mixed signals recently as the labor market continues to show signs of tightness amidst softening inflation data. Regardless, Fed officials have yet to see convincing evidence that inflation is cooling at a sufficient pace, and we will likely see more rate hikes ahead. Bloomberg surveyed economists are anticipating another half percent of hikes in the first quarter of 2023. In addition to this coming Thursday's release of December Consumer Price Index (CPI) data, markets will be keeping an eye out for comments from Fed officials that may provide a bit more insight on where rates could go from here. U.S. Treasury yields moved modestly last week. The 2-year was up 6 basis points (bps) to 4.49 percent while the 5-year, 10-year, and 30-year fell 6 bps (to 3.95 percent), 13 bps (to 3.75 percent), and 16 bps (to 3.81 percent), respectively.

January 3, 2023

General Market News

  • The Federal Reserve (Fed)'s policy rate rang in the new year at a level of 4.5 percent. This came after an historic increase of 4.25 percent over the course of 2022. While the future path of interest rates is far from certain as we ease into the early days of 2023, Bloomberg surveyed economists are anticipating another half percent of rate hikes in the first quarter. Expectations then point to rates remaining stable through the second and third quarters before lowering toward the end of the year. U.S. Treasury yields increased modestly during the final week of 2022. The 2-year, 5-year, 10-year, and 30-year gained 5 basis points (bps) (to 4.39 percent), 1 bp (to 3.98 percent), 11 bps (to 3.86 percent), and 11 bps (to 3.94 percent), respectively.

December 27, 2022

General Market News

  • The Federal Reserve’s (Fed’s) policy rate is set to end the year at 4.5 percent. Throughout 2022, the central bank hiked rates 17 times (4.25 percent of increases). Although the path of interest rates in 2023 is uncertain, Bloomberg-surveyed economists expect to see another 0.5 percent in rate increases in the first quarter before levels stabilize through the second and third quarters. Surveyed economists have also indicated that they expect the Fed to cut interest rates in the fourth quarter of 2023.

December 19, 2022

General Market News

  • The Federal Reserve (Fed) increased its policy rate by 50 basis points (bps) at last week’s Federal Open Market Committee (FOMC) meeting, ending its string of four consecutive 75 bps hikes. This brings the fed funds upper target to 4.5 percent. While the pace of rate increases slowed this month, Fed Chair Jerome Powell made it very clear that he still expects more pain ahead and plans to continue to fight inflation with more rate hikes to bring the fed funds rate above 5 percent. The U.S. Treasury curve was down modestly last week. The 2-year, 5-year, and 10-year fell 10 bps (to 4.25 percent), 11 bps (to 3.66 percent), and 7 bps (to 3.51 percent), respectively. The 30-year leveled out, ending the week at 3.56 percent. 

December 12, 2022

General Market News

  • The Federal Reserve (Fed)’s next rate decision will be announced this Wednesday, December 14, and market participants eagerly await the decision. Even after the four consecutive rate increases of 75 basis points (bps), several recent economic data releases have been strong enough to convince some that rates will have to go higher and/or stay higher for longer. The battle against persistent inflation continues as fear of a recession also remains front and center in many minds. The Federal Open Market Committee (FOMC) must navigate this balancing act with poise, not knowing what surprise developments could tip the scale one way or the other in the coming months. The U.S. Treasury curve changed very modestly last week. The 2-year held around 4.27 percent, the 5-year was up 3 bps (to 3.68 percent), the 10-year decreased 2 bps (to 3.47 percent), and the 30-year fell 10 bps (to 3.45 percent).

December 5, 2022

General Market News

  • Federal Reserve (Fed) Chair Jerome Powell gave a speech last Wednesday in which he stated, “Monetary policy affects the economy and inflation with uncertain lags, and the full effects of our rapid tightening so far are yet to be felt. Thus, it makes sense to moderate the pace of our rate increases.” While much of his speech explained that restrictive policy may be required for some time in order to get inflation down—specifically noting high wage growth—the market latched on to his moderation comments. Yields fell across the U.S. Treasury curve as a result, with the 2-year, 5-year, 10-year, and 30-year dropping 15 basis points (bps) (to 4.31 percent), 12 bps (to 3.74 percent), 18 bps (to 3.52 percent), and 10 bps (to 3.63 percent), respectively. Expectations for the terminal rate still hovered near 5 percent by the Fed’s March meeting, but with a slower pace of rate hikes, there is still plenty of data that could change between now and then.

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.