The market is bound to watch this week’s economic events closely, as the Federal Reserve and the U.S. Government face mounting pressure from the bond market turmoil. Rising yields have intensified concerns over inflation, interest rate policy, and overall financial stability, leaving investors on edge.
As America celebrates Memorial Day this Monday, this week’s economic prints are set to kick off tomorrow, drawing heightened attention from investors.
Tuesday – 2-Year Note Auction on Sight
While the 2-Year Note Auction is usually not typically a market-moving event, this week’s auction will be watched closely as investors gauge demand for short-term U.S. debt amid ongoing bond market volatility.
Also on Tuesday, we’ll get a look at the U.S. Durable Goods Orders for April, offering insight into business investment trends and overall economic momentum. In March, we saw a 9.2% increase, marking the third consecutive monthly hike in orders.
Tomorrow’s report will be crucial in determining whether this trend continues or if businesses are pulling back on spending due to inflation concerns and interest rate uncertainty.
Wednesday – 5-Year Auction and Fed Minutes
The 5-Year Note Auction will be another key reading on Wednesday, as it will help us determine what is the current medium-term debt demand by investors, and what the overall expectations regarding interest rates are.
Later in the day, the Federal Reserve will release minutes from the latest FOMC meeting on May 6–7. Arguably one of the most interesting events of the week, the Fed Minutes will give us a closer look at the Fed’s thinking on inflation, interest rates, and overall economic conditions.
Thursday – GDP Q1 Revised Data
On Thursday, May 29, the second estimate for Q1 2025 GDP will be released, offering a more refined look at economic growth after the advance estimate showed a -0.3% decline. This revision incorporates additional data, meaning the number could shift higher or lower depending on updated inputs. If the estimate worsens, recession concerns may intensify, while an upward revision could ease fears about economic contraction.
We will also have a new update on debt demand in the U.S. — this time for 7-year Treasury notes, offering insight into how investors are approaching medium-term debt amid shifting economic expectations.
Friday – Inflation on Sight
On Friday, we’ll get a more tangible sense of American inflation, as the Core PCE Price Index, the Federal Reserve’s preferred measure of inflation, will provide insight into consumer spending trends and price pressures. While March’s report showed a decrease in inflation, this month’s report will give us key information on whether tariffs are significantly impacting consumers in America.
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