Source: US Dept. of Treasury End of Day
• Rates moved lower last week with the 2-year falling eight basis points to 4.72% while the 5-year Treasury notes fell 15 basis points to 4.88%.
• Inflation accelerated in September as headline CPI rose 0.6% for the month and 3.7% YoY while core CPI increased 0.3% MoM and 2.6% YoY, keeping another Fed rate hike in play.
• Higher energy costs are adding to inflation pressures as a 9.1% increase in gasoline prices contributed roughly half of September’s CPI gain and pushed transportation and shipping costs higher.
• Consumer spending remains resilient despite weaker purchasing power as inflation continues to outpace wage growth and put added pressure on lower- and middle-income households.
• AI investment remains a key driver of economic growth, but heavy borrowing and recent weakness in technology stocks are raising concerns around leverage and elevated valuations.
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