Yields mixed on Fed’s Williams comments. Treasury yields traded in an 8-9 bp range today as markets remained focused on any US-Iran developments. A move lower in shorter-dated yields was driven by comments from New York Fed President Williams that one more rate hike may be needed later this year. The 2-year yield closed 5 bps lower at 4.88%, while the 10-year yield closed nearly flat at 5.24%. Meanwhile, equities continued to inch lower, with the S&P 500 and NASDAQ closing 0.17% and 0.09% lower, respectively.
Fed’s Williams provides insight into rate outlook. New York Fed President John Williams said today that one more rate hike could be needed “late this year,” shifting market expectations away from an October rate hike to December. Williams explained, “If the economy evolves in a manner broadly consistent with my forecast, one further upward adjustment of the federal funds target range may be appropriate…to support a timelier return of inflation to target.” He also shared that since the Fed hiked rates during their last meeting in September, “there is no need for urgency, and we have time to gather more information.”
Consumer confidence tumbles to lowest level since 2014. The Conference Board consumer confidence index fell to 81.9 in September, hitting its lowest level since 2014 and down 6.7 points from August’s downwardly revised 88.6. The present conditions gauge also fell to 109.3 from 117.2 the prior month. The report comes as consumers remain concerned over elevated prices, with fewer indicating that they plan on buying vehicles, large appliances, and homes. Chief economist at the Conference Board, Dana Peterson, said, “Consumers’ write-in responses regarding factors affecting the economy were mostly pessimistic in September. References to prices, the high cost of goods and services, and oil and gas prices in particular, rose to new heights.”
