The Treasury Borrowing Advisory Committee reported that global energy market volatility, driven by the Iran conflict and oil price fluctuations, has influenced U.S. Treasury yields. Ten-year yields rose to 4.6%, with the Fed Funds rate target range remaining above 3.50%-3.75%. The FOMC’s projections turned hawkish, raising 2026 policy-rate forecasts and core PCE inflation to 3.3%. U.S. equities remained resilient, while the dollar strengthened year-to-date. Real GDP growth slowed to 1.5% in Q2, supported by AI investment and consumer spending. The Committee noted Treasury remains adequately funded through FY26 but warned of widening gaps in FY27 and FY28. Recommendations included enhancing market transparency for Treasury transactions and exploring intraday repo mechanisms to address liquidity needs. The report also urged updated forward guidance to maintain flexibility amid evolving economic conditions.
Made by AI. If you spot anything of concern write us at contact@cybach.com. We’ll promptly correct irregularities.