Mid-Week Market Minute 5.24.23

Market Updates

Treasury Bonds Higher; GDP, Inflation Data Due This Week

Global stocks trended lower this week ahead of key economic data. Elsewhere, Treasury bond yields moved higher as investors anxiously await a resolution on the debt ceiling. Progress toward a budget deal struggled to progress this week, raising the stakes to reach an agreement in the next couple of days ahead of a June 1 deadline for default from the Treasury. While June 1 is the widely publicized X date, many officials believe the Treasury could remain solvent until mid-June, which could provide some much-needed breathing room for lawmakers.

On the data front, investors will look for clues from the Federal Reserve meeting minutes, due out on Wednesday afternoon. The markets currently are expecting the central bank to pause on further rate hikes at the next meeting on June 14, and any deviation from those expectations could drive further volatility. For the rest of the week, economic growth and inflation will be at the forefront with the second estimate of first-quarter GDP due on Thursday, followed by the widely followed PCE Price Index on Friday. Economists are expecting core inflation for April to come in around 0.3%, or about 4.6% for the year.

Source: GSAM, CNBC, JPMorgan

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