Weekly Economic Update: November 13, 2023
• Yields increased over the week with the two-year Treasury note rising by eighteen basis points to 5.05% while the five-year note increased by nineteen basis points to 4.67%.
• Despite the Treasury announcing less issuance on the longer end of the curve than markets expected, Treasury auctions fell flat during the week with little investor appetite as the thirty-year auction showcased the weakest demand in more than a decade.
• Moody’s placed the US Treasury on negative watch late Friday citing fiscal deterioration in the form of a large and widening deficit and the rising cost of debt coupled with political polarization with potential to inhibit sound fiscal policy development.
• The consumer is showing early signs of fatigue and possibly signaling the depletion of pent-up savings from pandemic era transfer funds as credit card balances posted the largest year over year gain in the third quarter and as delinquency rates jumped over the quarter from 7.2% to 8%.