Source: US Dept. of Treasury End of Day
• Yields fell over the week with the two-year Treasury note decreasing by two basis points to 0.22% while the five-year note fell by seven basis points to 0.79%.
• The bellwether, ten-year Treasury note decreased significantly, before reversing course and closing out the week at 1.36% as investors price in lower growth and inflation expectations over the long term.
• Consecutive months of weak auto and home sales may dampen second quarter growth as consumers become put off by high prices for these items, however, this self-correcting pricing mechanism further provides evidence that the recent spike in inflation is transitory.
• Further evidence that peak growth is behind us was supported by the recent ISM reading as the non-manufacturing index shows that the larger, service sector lost more momentum in June than expected.
