John Hancock: Weekly Market Recap Week Ended June 10th

Inflation expansion

Surging energy and food prices were key drivers of May’s increase in the Consumer Price Index to an annual rate of 8.6%, the highest since December 1981. Last month’s figure is up from 8.3% in April. Excluding energy and food, core inflation rose 0.6% on a month-to-month basis in May—the same rate as in April.

3.00%+ yields

The week’s decline in prices of government bonds accelerated after the release of Friday’s inflation report, sending the yield of the 10-year U.S. Treasury bond higher, to 3.16%. That was up from a yield of 2.74% just two weeks earlier, and it marks the second time this year that the yield has exceeded 3.00%, with the first occurring in early May.

Anxious consumers

Amid high inflation, a monthly gauge of U.S. consumer sentiment fell to the lowest level ever recorded by the survey, which dates to the 1970s. The University of Michigan on Friday said its sentiment gauge fell to a preliminary June reading of 50.2 from May’s already-depressed level of 58.4.

Fed ahead

With inflation continuing to run hot, policymakers are widely expected to approve an interest-rate increase of at least half a percentage point at Wednesday’s U.S. Federal Reserve policy meeting. It would be the second half-point increase in a row—twice as big as the quarter-point increases that the Fed has typically implemented when raising rates.

Source: https://wmr.jhinvestments.com/