Yields fall on improving MidEast sentiment. Treasury yields declined today, alongside falling oil prices, as American diplomats will reportedly return to Middle East embassies, alleviating worries about further escalation in the war with Iran. Rumors in the late afternoon that a US-Iran ceasefire had been reached helped place further downward pressure on yields. The 2-year yield ultimately closed 6 bps lower at 4.17%, and the 10-year yield closed 7 bps lower at 4.63%. Meanwhile, equities rose ahead of Nvidia Corp.’s earnings release tomorrow, with the S&P 500 and NASDAQ closing 0.32% and 0.66% higher, respectively.
US consumer sentiment falls to seven-month low. The Conference Board consumer confidence index dipped to 89.4 in August, below the prior month’s downwardly revised 90.2. The expectations gauge, which tracks consumer outlook over the next six months, fell to 68.2, below expectations of 74.3 and July’s downwardly revised 74.0, marking its lowest level since January. The present situation index, however, rose to a four-month high of 121.2. The Conference Board’s survey period ran August 3-16, during which average US gas prices hovered above $4 a gallon as US-Iran tensions remained heightened. The report attributed weakened consumer sentiment to gas prices, broader cost of living pressures, and hiring concerns.
Fed’s Collins looks to inflation data for next FOMC decision. Boston Fed President Susan Collins expressed the importance of prolonged inflation progress today following recent “mildly encouraging” data releases. She stated that, “should evidence of sustained inflation progress not materialize, I believe it will be appropriate to tighten policy soon.” With the next Fed policy meeting beginning on September 15th, Collins highlighted that she remains “particularly concerned about the price stability portion of the dual mandate.” Her comment follows the soft inflation data released earlier this month, as well as last week’s soft initial jobless claims print.