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From the Desk - Economic Commentary

Brandon Casey, VP/Member Strategies - 5/26/2022

U.S. stocks are higher in early trading on Thursday and appear poised to break the recent losing streak for markets. The DJIA is up 3.5% on the week and the S&P 500 is up 2.5%. The Nasdaq is 0.7% higher. The FOMC minutes yesterday showed that the Fed is prepared to raise interest rates by 50 basis points over the next several meetings, if necessary. Officials also said a restrictive policy may be warranted depending on the economic outlook and potential risks.

Looking at economic data today, initial jobless claims fell slightly more than expected to 210,000. Claims had been expected to fall by 3,000 to 215,000. Continuing claims edged higher to 1.35 million.

The first revision of first quarter U.S. GDP showed the economy contracted 1.5%, down from the initial estimate of -1.4%. The estimate for the first revision was -1.3%. Downward revisions to private inventory and residential investment offset an increase in consumer spending.

Pending home sales fell 3.9% in April, more than the 2.0% drop expected. It is the sixth straight month sale declined. Sales are down 9.1% year-over-year.

U.S. Treasury yields are lower this morning, with the 2-year Treasury yield down 5.4 basis points to 2.45%, the 5-year Treasury yield down 3.1 basis points to 2.69%, and the 10-year Treasury yield up 0.5 basis points to 2.74%. Advance rates are mostly higher, though some points on the curve are lower today.

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