Source: US Dept. of Treasury End of Day
• The yield on the 2-year Treasury note decreased by 10 basis points from 4.39% to 4.29% last week, while the 5-year note decreased by 14 basis points from 4.58% to 4.44%.
• Wall Street celebrated a softer-than-expected core inflation report as Core CPI increased 0.2 percent in December, the smallest rise since June, lowering the annual increase to 3.2 percent from 3.3 percent in November.
• The stronger-than-expected jobs report from last week dialed back expectations to only 1 rate cut in 2025, but two subdued inflation reports this week brought back the possibility of two rate cuts this year. The Fed is not expected to act at the January meeting, but the odds of a March rate cut have increased.
• Consumer spending remains strong, with retail sales rising by 0.4 percent in December, following a 0.8 percent gain in November. The increase was driven by higher gasoline prices and replacement demand for autos destroyed by recent hurricanes.
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