Source: US Dept. of Treasury End of Day
• Yields moved slightly higher over the week with the two-year Treasury note rising by three basis points to 4.75% while the five-year note increased by one basis points to 3.99%.
• Fed Chair Powell spoke before the Senate Banking Committee last week implying the risk of not doing enough is still greater than the risk of doing too much and that the FOMC is forecasting two additional hikes to come.
• Investors are not buying what the Fed is selling as markets are pricing in the possibility of only one more hike to take place before the end of the year followed by rate cuts priced to begin at the end of Q1 2024.
• The economy appears to be downshifting with initial unemployment claims totaling 264 thousand last week marking the highest reading since late 2021, further the Conference Board’s leading economic indicator index has declined for 14 consecutive months, the longest streak since the GFC.
