Treasury yields rise ahead of Fed chair’s speech

Treasury yields rise ahead of Fed chair’s speech

Aug. 25:

The main story today will be Federal Reserve Chair Jerome Powell’s remarks at the Fed’s annual Jackson Hole retreat. He is expected to reiterate the Fed’s dedication to wringing excess inflation out of the economy and its plan to continue weighing progress month by month. There might also be clues as to what the Fed’s response might look like, broadly speaking, over the near term.

Rates were a little higher this morning ahead of Powell’s speech, although not as high as they were earlier this week. The Dow traded up this morning. 

Employment, inflation and home price data highlight next week’s calendar

Next week we’ll get a look at home prices, consumer confidence, the Personal Consumption Expenditures price index — the Federal Reserve’s primary inflation metric — and the monthly employment report. There will also be $127 billion of Treasury note auctions.

Economic calendar

Tuesday, Aug. 29

  • S&P CoreLogic Case-Shiller Home Price Index
  • FHFA House Price Index
  • Job Openings
  • Consumer Confidence

Wednesday, Aug. 30

  • ADP Employment Report
  • Q2 Gross Domestic Product
  • Pending Home Sales

Thursday, Aug. 31

  • Personal Consumption Expenditures Price Index
  • Personal Income/Personal Spending
  • Weekly Initial Jobless Claims

Friday, Sept. 1

  • Monthly Employment Report
  • Construction Spending
  • ISM Manufacturing PMI

Treasury calendar

Thursday, Aug. 24

  • Yesterday’s $8 billion auction of 30-year Treasury Inflation-Protected Securities (TIPS) resulted in a yield of 1.97%, with demand higher than at the previous such auction. The difference between 30-year Treasury and 30-year TIPS yields indicates where the market expects to see the Consumer Price Index, on average, over the next 30 years. As of this morning, that difference trades at 2.32%.

Monday, Aug. 28

  • $45 billion auction of two-year Treasury notes
  • $46 billion auction of five-year Treasury notes

Tuesday, Aug. 29

  • $36 billion auction of seven-year Treasury notes

By Mike Kraft, Executive Director and Commercial Real Estate Treasurer for Commercial Banking
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