Source: US Dept. of Treasury End of Day
• Rates moved higher last week with the 2-year increasing by 12 basis points to 4.36% while the 5-year Treasury notes increased seven basis points to 4.53%.
• Chair Warsh’s hawkish Jackson Hole remarks drove markets to price in higher odds of a September rate hike and reinforced the Fed’s commitment to restoring price stability.
• Treasury buyback efforts had limited impact on yields, highlighting that economic fundamentals remain the primary driver of interest rates.
• July PCE inflation remained elevated, with headline and core readings unchanged at 3.7% and 3.3%, respectively, keeping pressure on the Fed to maintain a restrictive stance.
• Economic activity remains resilient, though recent consumer spending data suggest growth may be moderating as households increase savings and become more cautious.
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