Yields edge higher as energy prices remain elevated. Treasury yields rose over today’s session heading into the long weekend as energy costs remain high, with WTI crude hovering around $92 per barrel and Brent crude trading around $104 per barrel. The 2-year yield closed 3 bps higher at 4.79% (down 4 bps on the week), while the 10-year yield closed 1bp higher at 5.24% (down 3 bps on the week). Meanwhile, equities reversed course from yesterday’s sell-off, with the S&P 500 and NASDAQ climbing 0.59% and 0.64%, respectively.
Consumer sentiment sinks to five-month low. University of Michigan data released today showed US consumer sentiment fell to 46.3 in October, below expectations of 47.6 and marking a five-month low. Meanwhile, the current conditions gauge dropped to 44.7, the lowest reading on record and down from 50.9 in September. Consumers expect prices to increase 4.7% over the next year, up slightly from 4.6% in the prior period. Long-term inflation expectations also increased, with consumers anticipating 3.5% annual inflation over the next five to ten years. Joanne Hsu, the survey director, stated, “consumers of all political identifications agree that the outlook for the economy has softened since the beginning of the year prior to the Iran conflict,” as elevated gas prices, inflation concerns, and higher borrowing costs weigh on consumers.
Trump forms committee to investigate Fed Governor Cook. President Donald Trump today formed a “committee of inquiry” that will investigate Fed Governor Lisa Cook for allegations of mortgage fraud. According to Trump, the committee will “investigate the allegations against Governor Cook and report to [him] whether there is ‘cause’ for Governor Cook’s removal.” The Supreme Court ruled in June that Trump could not fire Cook without due process. In a statement, her lawyers said, “Governor Cook welcomes the opportunity to present the facts so she can clear her name and demonstrate there is no legal basis to fire her.” The hearing will take place at the White House on November 5.