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US Economy and Credit Markets Ended April 22, 2022
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).
Monday, April 25, 2022 @ 8:48 AM
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