MARKET UPDATE
Inflation Continues to Ease Ahead of Likely Fed Pause
05.30.2023
This morning equity markets moved lower and Treasury yields fell with the 10-year yield trading near 3.70%. The latest inflation data came in at consensus expectations of 5.5%, continuing to fall further from the 40-year highs in the summer of 2022. However, current inflation levels continue to hold significantly above the Fed's 2% target. Jobs data continues to indicate a robust labor market, although there are signs of some weakening in recent data. Since early 2022, the Fed has rapidly tightened monetary policy, with the cumulative amount of hikes this cycle now at 5.00%. While the Fed's message continues to be that it is unlikely that rates will be lower in 2023, the moderation seen in inflation data indicates they are likely to pause at the upcoming June FOMC meeting. Concern persists that the US economy will soon experience a recession, with worries about financial instability and potential harm to the labor market. The question of whether the Fed can tame inflation without sending the economy into a recession, remains in the front of investors minds.
- CMS Staff
TREASURY YIELDS
Term
3 Month
6 Month
2 Year
5 Year
10 Year
30 Year
Current
5.25%
5.41%
4.45%
3.81%
3.69%
3.89%
Last Month
5.04%
5.01%
4.01%
3.49%
3.43%
3.67%
BENCHMARKS
PRIME:
DJIA:
Crude Oil (WTI):
YEN:
Gold:
1 Year CMT:
1 Month LIBOR:
Fed Funds Effective:
Next FOMC Meeting:
8.25%
33,042.78
$69.46
139.8000
$1,959.36
5.20%
5.1537%
5.08%
June 13 - 14, 2023
Source: Bloomberg