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ECB Set for Rate Hike: Aggressive Members Signal Anticipated Increase!

Last week's better-than-expected inflation data and the news this week of plummeting used car prices coincided with a drop in 10-year Treasury yields to 3.73% on Wednesday. However, on Thursday morning, weekly jobless claims data came in below expectations, marking the lowest level in two months. This unexpected result suggests that the labor market remains tight, and the persistent upward pressure on wages continues to be a drag. As a result, the 10-year Treasury yield rebounded to 3.85% in the second half of the week.

Regarding the FOMC's monetary policy, former Federal Reserve President, Ben Bernanke, commented on Thursday that he believes the upcoming 0.25% rate hike could potentially be the final one of the current cycle.

On a different note, the Conference Board's leading indicator index experienced its fifteenth consecutive month of decline in June, marking the longest negative streak since its creation in 1959 without being in a recession. Moreover, the Conference Board projects that the US may enter a recession within the next 9 months.

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