Source: US Dept. of Treasury End of Day
• Yields increased over the week with the two-year Treasury note rising by four basis points to 3.26% while the five-year note also increased by four basis points to 2.99%
• Inflation appeared to moderate in July as headline CPI went unchanged compared to an expected increase of 0.2%, core inflation also surprised to the downside advancing 0.3% versus an expected 0.5%
• Though inflation moderated overall, there were still some components of the consumption basket that were cause for concern as food prices advanced by a robust 1.1% in July while rents on primary residences increased 0.7%
• Markets are now pricing in better odds of a 50 basis point hike from the Fed at their next meeting despite continued hawkish comments from FOMC members where it was reiterated that the Fed would need to see a significant and continued trend of moderating of inflation before considering a shift in policy
