Source: US Dept. of Treasury End of Day
• Rates fell last week with the 2-year Treasury note yield falling by ten basis points to 3.71% while the 5-year note fell by 11 basis points to 3.84%.
• Reports that Iran reopened the Strait of Hormuz triggered a sharp decline in crude prices, easing near term inflation risks tied to the Mideast conflict, though uncertainty remains given the continued U.S. naval blockade and lack of a formal peace accord.
• Elevated energy costs are already eroding household purchasing power; at the current national average gas price of $4.23/gal, nonmanagement workers spend 7.7 minutes of labor per gallon.
• Oil market disruptions have complicated the Federal Reserve’s policy calculus by intensifying the tradeoff between cooling inflation and sustaining employment, contributing to a prolonged pause amid rising dissent from both policy doves and hawks.
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