Source: US Dept. of Treasury End of Day
• Rates fell last week with the 2-year Treasury note decreasing by seven basis points to 4.28% while the 5-year Treasury note decreased by one basis point to 4.43%.
• The Fed left rates unchanged, maintaining its wait-and-see approach, and offering little forward guidance as policymakers continue to assess incoming economic and inflation data.
• Market expectations for additional Fed tightening eased following the meeting as Chair Warsh's comments were viewed as moderately dovish despite three policymakers voting in favor of a rate hike.
• Headline GDP growth slowed in the second quarter, but underlying domestic demand remained strong, with consumer spending and AI-related business investment continuing to support economic activity.
• Consumer spending rebounded sharply from first-quarter weakness, benefiting from improved weather, higher tax refunds, lower gasoline prices, and continued wealth gains among higher-income households.
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