Daily Market Color July 21, 2023FOMC Week Around the Corner Rates stay neutral ahead of FOMC week. Swap rates and Treasury yields were little changed ahead of next week’s FOMC decision, as the 2-year and 10-year UST yields closed at 4.84% and 3.84%, respectively. The 2s10s inversion remains over 100bps, ~15bps wider than the lows last week and a flashing signal of an incoming recession, although it certainly doesn’t feel like we are entering a recession anytime soon. Elsewhere, equities generally fell on the day, including the NASDAQ Composite and KBW Bank Index. Previewing next week’s FOMC decision. The Fed is widely expected to hike rates 25bps next week, the potential peak of an aggressive hiking cycle that stretches back to March of 2022. The decision will come after a slew of recent data indicated weakening U.S. price pressures, as June’s CPI and PPI came in below forecasts. The unrelenting strength of the labor market has remained a concern for the Fed, though June’s nonfarm payrolls showed signs of weakening. Week ahead. The Fed will announce their rate hike decision on Wednesday at 2 PM, to be followed by a press conference at 2:30 PM. GDP and durables goods (Thursday), and PCE, personal income, and personal spending figures (Friday) will be closely watched as well.