Daily Market Color

10-Year Treasury Yield Breaks Back Above 3%

Rates rise with the annual Jackson Hole Fed meeting looming. Treasury yields and rates rose across the curve today as investors prepare for Fed Chair Jerome Powell’s speech on Friday, where he’s expected to reiterate the FOMC’s commitment to curtailing inflation. The 2-year Treasury yield rose ~8bps to end the day at 3.31%, while the 10-year yield rose ~4bps on the day, settling at 3.02%. Despite the widespread agreement on the Fed’s hawkish mentality, it remains unclear whether the Fed will increase rates by 50 or 75 bps at the FOMC’s September meeting.  

Chicago Fed National Activity Index handily beats expectations. After two consecutive months of well below trend economic performance of May and June, July’s National Activity index was 0.27, which beat the consensus estimate of -0.19. Production and employment-related indicators led the way- however, the 3-month moving average for the National Activity index, the more stable indicator of economic performance, remained unchanged at -0.09%.

Day ahead. Tomorrow will feature numerous data releases, including the July new home sales report at 10:00 ET and the S&P global manufacturing August report at 9:45 ET. Minneapolis Fed President Neel Kashkari is set to make public comments at 7:00 PM ET to wrap up the day.

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