Source: US Dept. of Treasury End of Day
• Yields dropped sharply over the week with the two-year Treasury note falling by 77 basis points to 3.83% while the five-year note fell by 46 basis points to 3.51%
• The large fall in interest rates was driven by the collapse of two major banks with other regional banks left scrambling for funding as rapidly tightening monetary policy sent shockwaves through the banking sector drawing a swift and powerful response from the Treasury, lawmakers and central bankers alike
• Headline CPI advanced by an expected 0.4% in February while core CPI advanced by 0.5% versus an expected 0.4% as inflation for services, particularly shelter costs remain stubbornly elevated
• Excluding the outsized 0.8% increase in shelter costs, core inflation was much more manageable advancing by a slim 0.1% and with the price of new leases currently leveling off, core inflation should moderate in the coming months barring any surprises
