Source: US Dept. of Treasury End of Day
• Rates increased slightly last week with the 2-year Treasury note yield increasing by two basis points to 3.61% while the 5-year note increased by one basis point to 3.83%.
• Persistent geopolitical tensions and tariff risks have fueled renewed market volatility, dampening sentiment despite the economy avoiding major damage so far.
• Consumer spending and AI related business investment remain solid, though hiring has stalled, creating more job seekers even as layoffs stay low.
• Wealth effects from surging stock markets are driving consumption—particularly among affluent households—while the savings rate has dropped to multi year lows.
• Fourth quarter GDP is tracking strong, but recent spending has relied heavily on depleted savings as real disposable income stagnates, raising concerns about sustainability.
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