Source: US Dept. of Treasury End of Day
• Rates jumped last week with the 2-year Treasury note increasing by 17 basis points to 4.35% while the 5-year Treasury note increased by 15 basis points to 4.44%.
• Geopolitical tensions intensified as escalating U.S.-Iran hostilities and Houthi attacks in the Red Sea further disrupted global oil supplies, pushing crude oil prices above $100 per barrel and increasing energy market volatility.
• Markets reacted defensively as higher inflation expectations drove Treasury yields to their highest levels since early last year, while equities faced pressure from concerns over the economic impact of elevated oil prices.
• Fed expectations turned modestly more hawkish, with markets pricing in a greater likelihood of additional rate hikes, though policymakers are still expected to remain on hold as tighter financial conditions help contain inflation.
• A resilient labor market continues to support the Fed's cautious stance, as low unemployment claims and stable hiring conditions reduce the urgency for rate cuts.
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