US Economy and Credit Markets Ended April 22, 2022
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Treasury bond yields rose across the yield curve as the bond selloff continued last week. The 10-year Treasury yield reached its highest level since 2018 and 30-year Treasury yields topped 3% for the first time since April 2019 last week as inflation continued to pressure bond prices. To combat inflation, St. Louis Federal Reserve President James Bullard did not rule out a three-quarter-point rate hike at the Fed's May meeting, which hasn't been done since 1994. On Thursday, Federal Reserve Chairman Jerome Powell also took a more hawkish tone regarding raising interest rates more quickly. The market now expects a half-percentage-point rate increase, or double rate hike, at each of the Fed's next three meetings through July. U.S. housing starts rose in March to a 1.79 million annual rate, the highest rate since 2006. Multi-family construction was entirely responsible for the gain with construction up 26.2% in the past year. Meanwhile, single-family construction is down 4.4% over the past year and existing home sales are down 4.5% versus a year ago. The slowdown in single-family construction and existing home sales is largely due to 30-year mortgage rates above 5.0% pushing potential homebuyers back into the rental market. Major economic reports (related consensus forecasts, prior data) for the upcoming week include Tuesday: March Preliminary Durable Goods Orders (1.0%, -2.1%), April Conference Board Consumer Confidence (108.0, 107.2), March New Home Sales (-0.3%, -2.0%);  Wednesday: April 22 MBA Mortgage Applications (n/a, -5.0%), March Preliminary Wholesale Inventories MoM (1.7%, 2.5%),  March Pending Home Sales MoM (-1.0%, -4.1%); Thursday: 1Q Advance  GDP Annualized QoQ ( 1.1%, 6.9%), 1Q Advance Personal Consumption (3.4%, 2.5%), 1Q Advance GDP Price Index (7.2%, 7.1%), 1Q Advance Core PCE QoQ (5.6%, 5.0%), April 23 Initial Jobless Claims (180k, 184k), April 16 Continuing Claims (1393k, 1417k); Friday:  March Personal Income (0.4%, 0.5%), March Personal Spending (0.7%, 0.2%), April Final University of Michigan Sentiment (65.7, 65.7).
Posted on Monday, April 25, 2022 @ 8:48 AM

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.