Treasury Yields Decline After Fed Waller’s July Cut Call – US Market Wrap

Bond yields fell as Fed’s Waller reaffirmed his case for a July rate cut, while data showed that consumer inflation expectations have improved. Stock prices fluctuated in response to earnings. Trump signed the stablecoins bill, a victory for the cryptocurrency industry.

Short-dated Treasuries led advances as Waller hinted at dissent if his colleagues voted to keep rates unchanged in July. Bonds also gained as University of Michigan statistics revealed that consumers expect prices to rise at an annual rate of 4.4% over the next year, down from 5% the previous month. The S&P 500 remained relatively unchanged. The dollar fell somewhat, but it still advanced for the week.

Money markets still give a near-zero chance of a cut on July 30th. They anticipate roughly 45 BPS of easing by year-end, down from more than 65 BPS at the beginning of the month.

US consumer sentiment reached a five-month high in early July, as economic outlook improved. The preliminary July sentiment measure increased to 61.8 from 60.7 a month earlier, according to University of Michigan data released Friday. The news came after statistics released this week indicated that US retail sales returned in June in a wide advance, allaying some fears about a slowdown in consumer spending.