June 26, 2026
Yields lower to end out week
Over in bond land, Treasury yields are mostly lower before the opening bell Friday ahead of today’s economic releases, including May’s advance goods trade balance and preliminary wholesale inventories, along with the finalized June reading of consumer sentiment from the University of Michigan. Investors are turning their attention to next week’s economic data, including June’s Institute for Supply Management manufacturing purchasing managers’ index and jobs report, due on Wednesday and Thursday, respectively. As of 7:02 AM ET, the yield on the 10-year note is decreasing two basis points (0.02%) to 4.37%, while the 30-year bond yield is unchanged at 4.86%. The yield on the two-year note, which is more sensitive to changes in monetary policy, is down three basis points (0.03%) to 4.09%.
Treasury yields were mixed on Thursday as personal income and spending each climbed 0.7% month-over-month (MOM) in May, coming in above expectations. The core Personal Consumption Expenditures (PCE) Deflator, the Federal Reserve’s (Fed’s) preferred gauge of inflation, rose 0.3% MOM and 3.4% year-over-year (YOY) in May, both in line with expectations, while the headline PCE deflator increased 0.4% MOM and 4.1% YOY. Meanwhile, the third reading of first-quarter gross domestic product growth was revised higher to a 2.1% annualized pace, while consumer spending came in weaker than previously estimated at a 0.5% annualized pace. The yield on the 10-year note was unchanged at 4.39%, while the 30-year bond yield rose two basis points (0.02%) to 4.86%. The yield on the two-year note decreased three basis points (0.03%) to 4.12%. As of end of day Thursday (June 25), futures markets are pricing in eight basis points (0.08%) worth of rate hikes at the Fed’s upcoming July meeting, with a cumulative 34 basis points (0.34%) worth of rate hikes by year-end 2026.
On the data front, the advance goods trade balance for May is projected to show a deficit of $85.0 billion, higher than the prior month’s revised deficit of $83.0 billion. The preliminary May reading of wholesale inventories is expected to show an increase of 0.4% MOM compared to the prior month’s increase of 0.6%, while retail inventories are forecasted to have increased by 0.5% MOM in May, versus the prior month’s increase of 0.7%. The finalized June reading of consumer sentiment from the University of Michigan is expected to come in at 50.0 versus the initial reading of 48.9, while one-year and 5-10-year inflation expectations are projected to come in at 4.6% and 3.3%, compared to the preliminary readings of 4.6% and 3.4%, respectively. The Kansas City Fed will release their Services Survey for June, with the composite index expected to come in at 8, down from the prior month’s 10.
In the central bank space, Minneapolis Fed President Neel Kashkari is scheduled to speak today.
Mortgage rates were higher in the latest week. For the week ending June 25, the average 30-year fixed mortgage rate was up two basis points (0.02%) to 6.49%, versus 6.77% a year ago. The 15-year fixed mortgage rate increased three basis points (0.03%) to 5.84%, versus 5.89% a year ago.
Municipal Market Commentary
The Bloomberg 30-day visible supply fell $636 million to $12.853 billion on Thursday, below the 12-month average of $13.857 billion.
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