Market Updates

Weekly Economic Update: January 30, 2023

• Yields finished the week higher with the two-year Treasury note rising by two basis points to 4.20% while the five-year note increased by five basis points to 3.61%

• Fourth quarter GDP advanced by 2.9% in what appeared to be robust economic growth on the surface, however, finer details conveyed a different message showing economic activity and consumer spending notably trending downward in recent months

• The majority of last quarter’s real GDP growth was derived from inventory accumulation and a decline in imports, both of which are non-sustainable sources of economic growth and display a retreat in domestic consumption pointing to lower growth going forward

• The FOMC is poised to raise the Fed funds rate by 25 basis points this Wednesday to an upper bound of 4.75% and with markets currently pricing one more identical rate hike to occur in March, it is expected that the Fed will then pause, or outright finish their policy tightening campaign fulfilling their mandate to restore price stability

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