Market Updates

• Yields increased again with the yield on the 2-year Treasury note rising by 8 basis points to 4.33% while the 5-year note increased by 14 basis points to 4.39%.

• The FOMC lowered the Fed funds rate from 4.75% to 4.50% in what was considered a hawkish cut as market participants anticipate a Fed pause at the upcoming meeting slated for January 29th.

• Comments from Fed Chair Powell added to the hawkish tone as the Chairman implied that the FOMC does not see the basis for another rate reduction until further progress on stabilizing prices is achieved.

• The Fed favored PCE inflation gauge came in lower than expected with headline PCE advancing by a slim 0.1% in November and annual 2.4% while the core print advanced by 0.1% and 2.8%, respectively.

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