Market Updates

• Yields dropped over the week with the two-year Treasury note falling by fourteen basis points to 2.47% while the five-year note decreased by ten basis points to 2.72%.

• Personal consumption remained strong in April despite continued elevated price levels as real consumption advanced by a formidable 0.7%, however, the strong spending was financed primarily with savings as the personal savings rate fell to a fourteen year low of 4.4%.

• Prices moderated in April as headline PCE increased by 0.2%, marking the smallest advance since November of 2020 and reinforcing the narrative that peak inflation may be behind us.

• The Fed’s aggressive tightening plan was reaffirmed in the May meeting’s minutes and so far has been felt by the housing market where considerably higher borrowing costs and high prices have slowed sales of both new and existing homes for three consecutive months.