Fixed Income Update
The Treasury market is closing the week holding on to last Friday’s post–jobs report rally, with benchmark yields trading in tight ranges through a light economic calendar, a handful of Fed remarks, and three coupon auctions. The muted price action suggests last week’s repricing was both sufficient and measured. Attention now turns to next week’s July CPI on Tuesday and retail sales on Friday, which will test the resilience of the current market tone.
This week’s supply was met with soft demand, culminating in a 30-year auction that tailed by 2.1 basis points after underwhelming 3- and 10-year sales earlier in the week. Despite the results, yields remain 15–20 basis points lower across the curve compared with pre-NFP levels, and the auctions failed to disrupt the range. Investors continue to view Treasuries as attractive, supported by growing expectations for Fed easing and mounting signs of slower growth.
Front-end yields dipped yesterday after reports that President Trump will nominate CEA Chair Stephen Miran to the Fed, where he is expected to favor rate cuts during a short term ending in January. Fed Governor Lisa Cook called the weak July jobs report “concerning,” while Boston Fed President Susan Collins pointed to “extreme uncertainty” weighing on businesses. Minneapolis Fed President Neel Kashkari also voiced support for near-term easing, though he is not a voter this year.
While the market reacted swiftly to the data, the Fed’s overall tone remains restrained. With two more inflation reports and another jobs release before the September 19 meeting, policymakers who favored holding rates steady last week have little reason to shift course, leaving room to adjust if upcoming data warrant.
For the week, Treasury yields were higher by 3 to 7 basis points.
As of August 8, 2025
|
Index |
Current |
Last Week |
Wk Chg |
Last Year |
Yr Chg |
|
Tax-exempt MMF |
2.23% |
2.73% |
-.50% |
3.28% |
-1.05% |
|
Taxable MMF |
4.28% |
4.29% |
-.01% |
5.31% |
-1.03% |
|
|
|
|
|
|
|
|
2-Year Treasury |
3.76% |
3.68% |
.07% |
4.04% |
-.28% |
|
5-Year Treasury |
3.82% |
3.76% |
.07% |
3.83% |
.00% |
|
10-Year Treasury |
4.28% |
4.22% |
.06% |
3.99% |
.29% |
|
30-Year Treasury |
4.85% |
4.82% |
.03% |
4.28% |
.57% |
|
5-Year Exp. Inflation |
2.46% |
2.42% |
.05% |
2.00% |
.46% |
|
|
|
|
|
|
|
|
2-Year Corporate* |
4.10% |
4.11% |
-.01% |
4.56% |
-.46% |
|
5-Year Corporate* |
4.33% |
4.33% |
.00% |
4.51% |
-.18% |
|
10-Year Corporate* |
4.97% |
4.97% |
.00% |
4.95% |
.02% |
|
30-Year Corporate* |
5.66% |
5.67% |
-.01% |
5.40% |
.25% |
|
|
|
|
|
|
|
|
2-Year Municipal** |
2.27% |
2.38% |
-.10% |
2.77% |
-.49% |
|
5-Year Municipal** |
2.48% |
2.57% |
-.09% |
2.75% |
-.27% |
|
10-Year Municipal** |
3.31% |
3.41% |
-.11% |
2.92% |
.39% |
|
30-Year Municipal** |
4.87% |
4.92% |
-.05% |
3.98% |
.89% |
|
|
|
|
|
|
|
|
10-Year German Govt Bond |
2.68% |
2.68% |
.01% |
2.26% |
.42% |
|
10-Year U.K. Govt Bond |
4.60% |
4.52% |
.08% |
3.98% |
.62% |
|
10-Year Japanese Govt Bond |
1.48% |
1.55% |
-.07% |
.84% |
.64% |
|
10-Year Spanish Govt Bond |
3.25% |
3.26% |
-.01% |
3.13% |
.12% |
|
10-Year Italian Govt Bond |
3.47% |
3.51% |
-.04% |
3.70% |
-.22% |
|
|
|
|
|
|
|
|
Fed Funds |
4.50% |
4.50% |
.00% |
5.50% |
-1.00% |
|
Prime Rate |
7.50% |
7.50% |
.00% |
8.50% |
-1.00% |
|
Dollar*** |
$98.14 |
$99.14 |
-$1.00 |
$103.21 |
-$5.07 |
|
CRB |
$293.87 |
$295.28 |
-$1.41 |
$273.99 |
$19.88 |
|
Gold |
$3,439.10 |
$3,347.70 |
$91.40 |
$2,422.20 |
$1,016.90 |
|
Crude Oil |
$63.95 |
$67.33 |
-$3.38 |
$76.19 |
-$12.24 |
|
Unleaded Gasoline**** |
$2.09 |
$2.12 |
-$0.03 |
$2.17 |
-$0.09 |
Note: Municipal yields are as of the previous business day.
* Composite A
** General Obligation AA+
*** Int'l value of the U.S. dollar (Avg. exchange rate between the dollar and 6 major world currencies).
**** Futures price per gallon
Stock Market Update
So much for the “doldrums of summer.” Stock indices moved notably higher this week, recovering well from last Friday’s sell-off in reaction to the disappointing July jobs report and a new round of tariff news. As shown in the table below, for the week (as of Thursday’s market close) the Dow Jones Industrial Average rose by 0.87%, the S&P 500 rose by 1.64%, the Nasdaq Composite rose by a strong 2.87%, the Russell Mid Cap rose by 0.79%, and the Russell 2000 rose by an impressive 2.23%. Although concerns lurk in the background about a possible softening labor market and rising tariff impacts, the equity market focused on some of the more bullish topics this week.
Second quarter earnings season is one of the higher-profile bullish talking points. In general, metrics have been better than expected and there have been positive/upward earnings-revisions trends. Approximately 90% of the S&P 500 companies have now reported their results. The blended earnings growth rate (companies that have reported + companies that have yet to report their results) stands at 11.8% year over year, well above the 4.9% expected growth rate at the end of the 2nd quarter. About 82% of companies have beat expectations and earnings have surprised to the upside by 8.5% in aggregate. Layering on to last week’s comments about earnings season, these are some of the takeaway themes: 1) robust big tech earnings growth; 2) continued hyperscaler commitment to outsized artificial intelligence-related (AI) capex spending; 3) improved AI monetization and productivity dynamics; 4) some successful internal tariff mitigation measures; 5) notable revenue beats amidst the tariff “froth;” 6) numerous favorable earnings guidance commentary from company management teams; 7) tailwinds from foreign currency exchange shifts; and 8) earnings & free cash flow tailwinds from accelerated depreciation in the reconciliation bill.
It was a busy week for corporate America, as 122 of the S&P 500 companies reported results. As we head into the final weeks of summer, earnings season is slowing down. Next week, a modest 8 of the S&P 500 companies will report their quarterly results.
As of July 31, 2025
|
Index |
Current Week |
Month of Aug. |
YTD |
|
Dow Jones Industrial Avg. |
0.87% |
-0.37% |
4.33% |
|
S&P 500 |
1.64% |
0.02% |
8.61% |
|
Nasdaq |
2.87% |
0.57% |
10.42% |
|
MSCI EAFE |
2.30% |
1.91% |
20.51% |
|
Russell Mid Cap |
0.79% |
-0.60% |
6.14% |
|
Russell 2000 |
2.23% |
0.16% |
0.08% |
