Economic Data Continues to Keep the Fed on Hold

May 28, 2024

Economic Data Continues to Keep the Fed on Hold Photo

After last week’s S&P Global Purchasing Managers’ Index (PMI) showed business activity accelerating at the fastest pace in two years,1 bond investors were again forced to scale back their expectations for interest rate cuts this year. Even more troubling for Federal Reserve (Fed) policymakers and the bond market were signs in the PMI report that price pressures are also building.2 The 2-year Treasury note moved closer to the psychologically important 5% mark by week’s end.3 Another big earnings “beat” from Nvidia helped the S&P 500 Index take the move higher in rates in stride, finishing the week almost exactly where it started.4 

This holiday-shortened week’s economic calendar includes the second look at first-quarter gross domestic product (GDP) on Thursday and the Fed’s favorite inflation gauge, personal consumption expenditures (PCE), on Friday.5



1,2S&P Global – News Release: S&P Global Flash US Composite PMI®; 5/23/24

3CNBC – U.S. 2-Year Treasury; as of 5/28/24

4CNBC – Nasdaq closes Friday at record high as Nvidia and the AI trade rallies on; 5/24/24

5MarketWatch – U.S. Economic Calendar; as of 5/28/24

Tags: PMI | PCE | Gross Domestic Product (GDP) | Federal Reserve | Inflation | Interest rates

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