Source: US Dept. of Treasury End of Day
• Yields increased during the week with the two-year Treasury note rising eight basis points to 0.25% while the five-year note increased by thirteen basis points to 0.87%.
• The Federal Reserve met last week and for the first time since the pandemic began, signaled a slight shift in policy stance, moving up their expected rate hike into 2023.
• Market reactions were heard as equities tumbled while in fixed income markets the yield curve flattened considerably as front-end yields notched higher.
• Short-term inflation expectations are justifiably elevated but long-term expectations remain anchored as the market perceives that disinflationary forces will prevail once supply disruptions and labor constraints ease.
