Source: US Dept. of Treasury End of Day
• Two-year Treasury notes declined five basis points last week as the bombing in Iraq heightened fears of renewed geopolitical tensions in the Middle East that could ripple through the U.S. economy, stoking higher oil prices and more uncertainty in the financial markets. The flight to safety in the U.S. Treasury market lowered yields across all maturities.
• While we expect that consumers will continue to drive the economy forward this year, the growth rate in personal consumption should slow from last year, reflecting weaker employment and income gains.
• The government’s jobs report next Friday will provide some clue as to whether reduced household expectations regarding labor market conditions received any validation from activity in December. December nonfarm payrolls are expected to rise 180,000, and the jobless rate should hold at 3.5%.
