Daily Market Color May 27, 2016Quiet Trading Ahead of Yellen and Holiday Weekend To the surprise of no one, both US stock and bond markets are trading sluggishly ahead of the early close and holiday weekend. Fed Chair Yellen’s question and answer session with renowned Harvard economist Greg Mankiw this afternoon is the wildcard, with some market participants pushing back vacation plans in order to hear what she has to say and gauge market impact. Yellen may not provide any new information about monetary policy, but the mere prospect is enough to warrant attention. The discussion is set to begin at 1:15pm EST, with a hard stop at 2:00pm. Yellen’s comments come one day after Fed Governor Jerome Powell said it may be appropriate to raise interest rates again “fairly soon”. Powell did clarify that his support of a rate hike would depend on “the incoming data and the evolving risks” between now and the next FOMC meeting in June. New data released today showed US Q1 GDP was revised upwards, reflecting a smaller drag from trade than was previously reported. The Commerce Department’s second GDP estimate for the first quarter showed 0.8% growth as opposed to the 0.5% pace reported previously. The revised data still shows the US economy experienced its weakest quarterly growth in a year in Q1, but economists have questions over the accuracy of the model used by the government to strip out seasonal patterns from the data. Q1 GDP data has underperformed in five of the last six years, and economists expect growth to rebound in the second quarter closer to the 2.5%-3.0% range. In this quiet pre-holiday session, all three major US stock indexes are up less than 0.50%, while Treasury yields and swap rates are flat to 1 bp higher across the curve. The market closes today at 2pm EST today and will remain closed on Monday. Have a great Memorial Day Weekend.