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MARKET UPDATE

Inflation Elevated And Uncertainty on Fed's Next Move

12.6.2023

This morning equity markets edged higher and Treasury yields fell with the 10-year yield trading modestly above 4.10%.  The latest CPI data came in at 3.2% year over year, just below consensus expectations, and continued to trend far below the 40-year highs of summer 2022.  Nonetheless, the current level remains well above the Fed's 2% target.  On the other hand, recent jobs data continued to weaken.  This suggests that rates may be approaching a peak, as the labor market starts to slow.  Since early 2022, the Fed has rapidly tightened monetary policy, with the cumulative amount of hikes now at 5.25%.  At the lastest FOMC meeting, the Fed held rates steady and reiterated its commitment to bring inflation down to their target of 2%.  The message remains that there may yet be an additional hike ahead, and that rates are likely to be higher for longer than the market had previously expected.  However, the past few months of economic data have been encouraging and are trending in the right direction.  Concern persists that inflation is elevated, but fears about a near term recession have eased.  The question of whether the Fed can tame inflation without creating other economic issues, "a soft landing", 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

5.40%

5.37%

4.60%

4.13%

4.13%

4.24%

Last Month

5.42%

5.47%

4.93%

4.59%

4.64%

4.81%

BENCHMARKS

PRIME:

DJIA:

Crude Oil (WTI):

YEN:

Gold:

1 Year CMT:

1 Month T-Bill:

Fed Funds Effective:
Next FOMC Meeting:

8.50%

36,132.61

$69.62

147.2100

$2,026.13

5.08%

5.381%

5.33%

Dec 12-13, 2023

Source: Bloomberg

ECONOMIC CALENDAR
Week of 12
/4/2023

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