Source: US Dept. of Treasury End of Day
• Rates fell last week with the 2-year Treasury note decreasing by nine basis points to 4.09% while the 5-year Treasury note decreased by 11 basis points to 4.13%.
• Oil prices have collapsed since the ceasefire, with WTI falling below $70/bbl, creating a meaningful near-term disinflationary tailwind.
• May inflation was boosted by energy costs, but lower crude and gasoline prices should reverse some of that pressure in coming months.
• Core inflation remains sticky, though moderating wages, improving productivity, and slowing rent growth point to softer services inflation ahead.
• Consumer spending remains resilient despite weakening household finances, supported by a healthy labor market and the expected boost from lower fuel costs.
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