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Recent Economic Commentary
Brandon Casey, VP/Member Strategies - 5/25/2022
U.S. stocks are slightly higher Wednesday morning as investors await the release of the latest FOMC minutes. Stocks have been volatile to begin the week but are working towards ending a historically long weekly losing streak. Despite what the minutes might say later today, derivative markets are beginning to question if the Fed will hike 50 basis points in both of the next two meetings. Futures contracts are now pricing at levels below 100 basis points after the two meetings.
Looking at economic data today, durable goods orders rose 0.4% in April, less than expected. Core capital goods orders were up 0.3% for the month. Elsewhere, MBA mortgage applications fell 1.2% last week due to a slump in refinance activity. The report also showed that the average interest rate of a conforming 30-year mortgage fell three basis points to 5.46%.
U.S. Treasury yields are steeper this morning, with the 2-year Treasury yield down 2.1 basis points to 2.50%, the 5-year Treasury yield down 2.1 basis points to 2.74%, and the 10-year Treasury yield up 0.7 basis points to 2.77%. Short-term advance rates are higher, while long-term advance rates are lower today.