Source: US Dept. of Treasury End of Day
• Rates were mixed last week with the 2-year Treasury note yield rising by five basis points to 4.13% while the 5-year note remained the same at 4.26%.
• White House pressure for early rate cuts contrasts with a Fed backdrop that has shifted more hawkish in recent months.
• Growth has reaccelerated, supported by resilient labor markets, firm consumer spending, and a continued surge in AI investment.
• Inflation has moved higher, driven by energy costs, challenging prior expectations for disinflation and delaying easing prospects.
• Markets are repricing toward tighter policy, with rising yields and financial conditions tightening even as equity markets remain firm.
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