Economic data this week is again likely to be overshadowed by the debt ceiling drama in Washington, D.C., as the deadline approaches for a resolution before the government runs out of money and the Biden administration is forced to make some difficult decisions. President Biden and House Speaker McCarthy are scheduled to meet again this afternoon to resume talks on a deal.1
Investors will also be focused on minutes from the Federal Reserve’s (Fed) May meeting out Wednesday. Numerous Fed officials now suggest a pause in hikes is likely at its upcoming June meeting, as stress in the banking system will likely reduce the need for more tightening. Despite more dovish talk from the Fed, Treasury yields across the curve have been moving higher of late. The 2-year Treasury note yield has risen more than 50 basis points since early May and now stands at its highest level since the early-March onset of stress in the banking system.
Economic data this week is highlighted by Tuesday’s release of new home sales information and the S&P Global Purchasing Managers’ Index for manufacturing and services, along with the monthly Personal Consumption Expenditures Price Index on Friday.2
Sources:
1Reuters – Biden and McCarthy to meet on Monday as debt ceiling talks resume; 5/22/2023
2MarketWatch – U.S. Economic Calendar; as of 5/22/2023
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