Bond Market Update
Updated: 27-May-25 10:20 ET
A confidence boost
Data Recon
- The Conference Board's Consumer Confidence Index jumped to 98.0 in May (Briefing.com consensus 87.0) from a downwardly revised 85.7 (from 86.0) in June, breaking a string of five consecutive months of decline.
- The key takeaway from the report is that there was a clear connection between the increase in consumer confidence and the pause in the reciprocal tariff rates, which triggered a material rally in stock prices and improved forecasts for the economic outlook. Note: roughly half of the responses came after the May 12 news that the U.S. and China were pausing their respective reciprocal tariff rates.
- The Present Situation Index rose from 131.1 to 135.9.
- The Expectations Index surged from 55.4 to 72.8 but remains below the threshold of 80 that usually signals a recession ahead.
- Average 12-month inflation expectations settled back from 7.0% in April to 6.5% in May.
- The key takeaway from the report is that there was a clear connection between the increase in consumer confidence and the pause in the reciprocal tariff rates, which triggered a material rally in stock prices and improved forecasts for the economic outlook. Note: roughly half of the responses came after the May 12 news that the U.S. and China were pausing their respective reciprocal tariff rates.
- Yield check:
- 2-yr: -1 bp to 3.98%
- 3-yr: -2 bps to 3.94%
- 5-yr: -3 bps to 4.05%
- 10-yr: -4 bps to 4.47%
- 30-yr: -7 bps to 4.97%
