Rising Expectations: Treasury Yields and Inflation in Focus

Yields on 10-year Treasuries hit a high of 4.735% after the underlying personal consumption expenditures price index rose 3.7% in the first quarter, although economic growth was a slower-than-expected 1.6%. On Friday, personal income and spending data showed underlying PCE up 0.3% month-over-month and 2.8% year-over-year. Expectations for Fed rate cuts are now less certain, with an anticipated cut in November.

According to a University of Michigan survey, one-year inflation expectations rose to 3.2% from 2.9% in April.

New home sales rose 8.8% month-over-month in March, reaching an annual pace of 693,000, a much stronger than expected result.

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