4
Market Update – Economy, Federal Reserve & Bond Market Economy: Modest growth in spending & production, slowing but elevated inflation, employment strength
Q2 2025 Q1 2025 Q4 2024 Q3 2024 Q2 2024 Q1 2024 Q4 2023 Q3 2023 2.00% 2.00% 2.50% 2.70% 3.00% 2.90% 3.20% 3.20% 2.79% 2.70% 2.86% 2.66% 2.63% 2.98% 3.04% 3.66% 4.10% 4.20% 4.10% 4.10% 4.10% 3.90% 3.80% 3.80%
Real GDP (YOY)
Core PCE Inflation (YOY)
Unemployment
U.S. Treasury Yields
6
5
4
3
2
1
0
2018
2019
2020
2021
2022
2023
2024
2025
Years
Year
2 YR
5 YR
10 YR
Federal Reserve: The Fed remains vigilant to downside risks, with keen attention to the uncertainty surrounding tariffs & geopolitical risks. The Fed has held rates steady since December 2024 after cutting 3 times in the last half of 2024 by a total of 100 basis points. While the Fed continues to reduce positions in Treasuries, Agency & Agency MBS, it has slowed its monthly balance sheet reductions to $5 billion of Treasuries & $35 billion of Agency & Agency MBS.
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