Economist's Insights

Weekly Market Recap – Fed Favors Monthly Cap for Phasing out Reinvestments and Signals June Hike Likely

May 26, 2017

Treasury yields were little changed for the week ended May 26. The major focus was on the Fed Minutes released on Wednesday as more detail on the potential process for phasing out reinvestments eased the market’s fear of anything other than a gradual roll-off. Oil prices were volatile as investors sold the news of and OPEC extension, locking in gains from the days preceding the decision. First quarter growth was 0.5% better (1.2%) after the first revision, creating a higher bar for growth in the second quarter. As to the second quarter, weekly leading indicators showed weaker than expected results for residential investment (housing), trade, inventories, and business investment. Click here to see how markets responded to all the news.