Source: US Dept. of Treasury End of Day
• Yields continued to descend over the week with the two-year Treasury note falling by 11 basis points to 2.88% while the five-year note dropped by 17 basis points to 2.68%
• The FOMC raised the Fed Funds rate by a fully anticipated 75 basis points last week and provided little forward guidance on the future path of interest rates as they will have a larger than usual amount of data to digest before their next meeting slated for September 20-21
• GDP contracted by -0.9% in the first look at Q2 growth which was highlighted by an outsized drag of -2.0% from inventories however, consumer spending remained firm suggesting the slowdown in growth may be more attributable to supply constraints than to weakening demand
• Corporate earnings releases for Q2 are beginning to show consumers resisting higher prices and if sustained, will lead to easing wage pressures providing a potential welcome sign for the Fed in their effort to rein in inflation
