FEATURED MARKET DATA
Higher For Longer
The yield on the 10-Year US Treasury rose in August to its highest level since 2007. The month saw real yields rise even more and are now at the highest level since 2009. Real, or inflation-adjusted, yields reflect the difference between the expected levels of inflation and nominal Treasury yields. Myriad factors impact nominal and real yields including supply and demand.
by Laura Fox FEATURED MARKET DATA
Fed’s Last Hike?
The last week of July brought a mixed bag of economic data and comments from the Federal Reserve Chair. Inflation declined as measured by the Fed’s preferred measure of inflation, Personal Consumption Expenditures (PCE). The chart below shows PCE excluding food and energy, which declined for the month on a decrease in the price of goods.
by Laura Fox FEATURED MARKET DATA
Stronger Data Help Lift Rates
Economic data was mostly stronger than expected in June. The Citi Economic Surprise Index, which measures the differences in actual and forecasted economic data, rose in June as data such as retail sales, consumer confidence and durable goods orders were all stronger than expected.
by Laura Fox FEATURED MARKET DATA
Persistent Inflation
While CPI and Core CPI have steadily declined over the past year, wage growth has remained elevated. Following a November 2022 speech by Federal Reserve Chair Powell, many economists and market participants have focused on the impact of wages on non-housing services inflation.
by Laura Fox FEATURED MARKET DATA
Fed Nearing End of Hikes
The “dot plots” released by the Fed in March depicted their plans to hike rates one more time this year and then hold rates steady. The Fed has also stated they remain data dependent and thus Personal Consumption Expenditures (PCE), the Fed’s preferred measure of inflation, is an important data point.
by Laura Fox FEATURED MARKET DATA
Like a Lion
The rates market roared in March as Treasury yields rose and fell sharply in response to economic data and market developments. The 2-year Treasury yield began the month near 4.8%, climbed to over 5% and dipped below 4% during the month.
by Laura Fox FEATURED MARKET DATA
Treasury Curve Further Inverts
The Treasury curve inverted more deeply in February as 2-year Treasury yields rose 61 basis points. The increase was caused by expectations for additional rate hikes due to stronger inflation and employment reports during the month.
by Laura Fox FEATURED MARKET DATA
Strong Bond Returns
Bonds generated strong returns in January as U.S. Treasury yields declined modestly and credit spreads declined. A large spike in market yields in 2022 boosted income for bondholders, which aids returns.
by Laura Fox FEATURED MARKET DATA
Tighter Financial Conditions Slow Growth
During 2022, global central banks tightened monetary policy in an effort to combat heightened inflation. This tightened financial conditions and has resulted in manufacturers slowing production globally.
by Laura Fox FEATURED MARKET DATA
Fed and Inflation Driving Markets
Stocks rallied in November on softer inflation data and expectations for the Fed to slow the pace of rate hikes beginning in December. Together, the news helped lift the S&P 500 index 5.38% for the month.
by Laura Fox 