US Monthly Outlook: The Summer of Bonds

The report suggests a more favorable outlook for US Treasuries this summer as Fed hike expectations appear aggressive and unwarranted by current data. Consumer spending remains a significant headwind due to weak real income growth.

Key Takeaways

• 1.The US Treasury market is expected to perform favorably during the summer months due to positive historical seasonals.
• 2.The Fed is likely to remain on hold until late 2026 rather than hike rates, as inflation expectations have cooled and growth remains concentrated in specific sectors.
• 3.Consumer spending is facing significant headwinds from declining real wages and a historically low savings rate.

Table of Contents

• Macro Musings
• Fed & Rates View
• Market Thoughts
• Special Topic: Consumer spending & the World Cup
• Forecasts

Document Preview

Page 1 of 5

Subscribe for full accessStart Free Trial