Source: US Dept. of Treasury End of Day
• Rates moved higher last week with the 2-year rising 11 basis points to 4.87% while the 5-year Treasury notes increased 13 basis points to 5.00%.
• Consumer spending remains a key source of economic resilience as strong retail sales suggest demand has yet to soften despite higher prices and borrowing costs.
• Financial conditions continue to tighten as higher energy prices and expectations for additional Fed rate hikes push Treasury yields and mortgage rates to multi-decade highs.
• Consumer sentiment fell further in September with the University of Michigan index reaching its lowest level on record, highlighting the growing disconnect between household sentiment and resilient economic activity.
• Business investment remains a significant growth driver as AI-related capital spending and strong equipment orders support above-trend GDP growth despite mounting headwinds.
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