Market Updates

Weekly Economic Update: January 17, 2023

• Yields fell over the week with the two-year Treasury note falling by 6 basis points to 4.22% while the five-year note fell by 37 basis points to 3.54%

• Headline CPI cooled in December slowing by -0.1% while core CPI increased by 0.3% as lagged shelter costs propped up services components of the core reading

• Ongoing banter from Fed members would suggest the Fed will continue to remain extra cautious to not prematurely step away from restrictive policy despite markets challenging that notion with Fed funds rate cuts priced into the back half of 2023

• The FOMC meets February 1st where it is all but certain they will raise the Fed funds rate by an additional 25 basis points to an upper bound of 4.75% in their ongoing effort to tame inflation

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