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Treasury Rates Update: July 20th, 2023

Summary: Below are daily changes in 10 year Treasuries over the past two weeks---up 25bp The Fed raised the Fed Funds rate 25bp at their July 26 meeting and the 10 year US Treasury rates increased 15bp the next day. Time will be the judge whether the Fed's 25bp increase was warranted. The Fed's next meeting is a long way off: September 20. Between now and then, there will be 2 CPI and 2 monthly jobs reports---this could be a bumpy ride till then.

For example the CPI is currently 3.0% and its decline has been rapid. The next CPI report is August 10 for July 2023. My guess is CPI will be up 0.3% for the month. The problem is when this comes on, the July 2022 will fall off. CPI for July 2022 was 0.0%. Thus the next change will be an increase and the annual CPI will come in ~3.3% While this is not a material change in the annual rate, the fact that it is an increase, the market will be caught off guard given the improvement in CPI over the past 8 months.


For the past 2 weeks, 10 Year Treasury rates were up 25bp Past week: up 16bp following the Fed’s 7.26.23 meeting where they increased their Fed Funds rate by 25bp in spite of the CPI decreasing 100bp to 3.00%

Next Fed meeting is 9.20.23 Twice a year the Fed meetings are 6 weeks apart, in this coming summer break it is 8 weeks. Over the recent past, the market has tended to drift upward between longer breaks in Fed meetings. There will be 2 CPI and 2 jobs announcements before the next Fed meeting.


Red line is most current rates while green line is one week ago.

The entire yield curve increased. 2 year term INCREASED 11bp on top of last week’s 21bp.

10 year up 16bp. This made the inverted yield curve less steep. One month rates was up 3bp

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