In a week when risky assets performed well and equities hit multiyear highs, Treasury performance was mixed.
Treasuries initially rallied ahead of the FOMC meeting and then sold off over the rest of the week. Over the week,
2-year and 5-year yields rose 3bp, while 10- and 30-year yields fell 2bp and 5bp, respectively. On the economic
data front, housing data remained very weak, showing declines in the NAHB housing market index and housing
starts, while the latest CPI report showed continued softness in core inflation. At the FOMC meeting this
week, the Fed made some small tweaks to the statement, but maintained its “extended period” language. Overall,
recent economic data and Fed commentary remain in line with our forecast for strong growth, tame inflation, and a
Fed on hold until early next year.
Treasuries
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