6 July 2023
US Treasury yields rose while stocks declined as investors analyzed the minutes from the Federal Reserve’s recent meeting. The yield on two-year Treasuries, a gauge of market expectations for interest rates, reached 4.94%, while the 10-year yield climbed to 3.93%. The inverted yield curve, a possible indicator of an impending economic downturn, has raised concerns. The Fed’s decision to pause its rate-hiking cycle after 10 consecutive increases during the June meeting surprised the market. With the central bank forecasting two more rate hikes this year, there are concerns about their impact on economic growth and corporate profits. The next rate decision is expected in three weeks. Ed Hyman, founder and chairman of Evercore ISI, expressed his bearish outlook on the economy due to the yield curve, monetary contraction, and simultaneous rate hikes.