Bond Market Update

Data Recon

• The preliminary Index of Consumer Sentiment for June checked in at 65.6 (Briefing.com consensus 73.0) versus the final reading of 69.1 for May. In the same period a year ago, the index stood at 64.2.
  • The key takeaway from the report is that consumers' assessment of their personal finances slipped due to high prices and weakening incomes. That could presage some weakening spending activity.
    • The Current Economic Conditions Index fell to 62.5 from the final reading of 69.6 for May. In the same period a year ago, the index stood at 68.9.
    • The Index of Consumer Expectations slipped to 67.6 from the final reading of 68.8 for May. In the same period a year ago, the index stood at 61.1.
    • Year-ahead inflation expectations held steady at 3.3%, up from the 2.3-3.0% range seen in the two years before the pandemic.
    • Long-run inflation expectations increased to 3.1% from 3.0%. They have held between 2.9% and 3.1% in 31 of the last 35 months. In the two years pre-pandemic, long-run inflation expectations were in the 2.2-2.6% range.
• Yield check:
  • 2-yr: +1 bp to 4.70%
  • 3-yr: +1 bp to 4.44%
  • 5-yr: unch at 4.24%
  • 10-yr: -2 bps to 4.22%
  • 30-yr: -5 bps to 4.35%