Rates Rise to End the Week

Rates rise once again across a steepening curve. One day removed from their biggest move in months, rates closed higher once again- the 10-year Treasury yield rising 1.45% after rising as high as 1.465% at one point during the session. The spread between 2-year and 10-year rates widened out as well, ending at 1.18% – steepening 8 basis points since the start of the week. Risk assets were somewhat challenged on the day, the S&P 500 and DJIA eking out small gains while the tech-heavy Nasdaq declined.

Household net worth hits record as home prices soar. A rising stock market and record housing prices increased U.S. household net worth to $141.7 trillion in the second quarter, a fresh record high. Data out Friday showed that home prices are not abating, hitting a four-month high in August. Purchases of new single-family homes increased 1.5% in August to an annualized 740,000 with the median sale price hitting another record at $390,900.

After this week’s announcement on a potential November taper, next week will offer a slew of economic data points. Some of the more anticipated releases next week include consumer confidence on Tuesday and University of Michigan’s consumer sentiment survey on Friday, construction spending / purchasing managers’ index (PMI) on Friday, and lastly the Fed’s preferred gauge of inflation-  the personal consumption expenditure (PCE), being released on Friday. Also next week, Tresury Secretary Yellen and Fed Chairman Powell will give their Senate testimony on Tuesday.