Weekly Economic Update: May 1, 2023
• Yields fell over the week with the two-year Treasury note dropping by seventeen basis points to 4.00% while the five-year note fell by eighteen basis points to 3.49%.
• Real GDP advanced by 1.1% in Q1 2023 with consumer spending buoying growth with a robust 3.7% reading while inventory drawdowns, business spending and residential outlays dragged on growth.
• Despite strong consumer spending, momentum is fading as personal consumption was flat in March, albeit beating expectations, it marks a third consecutive drop in the figure.
• Despite the failure of First Republic Bank over the weekend, the Federal Reserve is poised to follow through with another 25-basis point hike in the Fed funds rate bringing the upper bound to 5.25% as they continue to fulfill their mandate of stabilizing price levels.