Treasury prices edge higher Friday, dragging down yields, as global equity markets tip lower following earnings from a pair of big tech companies and President Donald Trump’s threat to impose tariffs on China over its handling of the COVID-19 pandemic.
Dallas Fed President Robert Kaplan said the recession will be so severe that the unemployment rate will likely end the year as high as 8%-10%. In an interview with the Fox Business Network, Kaplan said the contraction in second quarter GDP could be as much as 30% on an annualized basis. Kaplan said he thinks the economy will recover partially in the third and fourth quarter but annual growth will still contract in a range of 4.5% to 5%. The Fed's interest rates will stay "low for longer" and the central bank "is going to need to do more in terms of other actions to bridge this period," Kaplan said. The Dallas Fed president is a voting member of the Fed's interest-rate committee this year.
Treasury yields held their lows on Thursday after economic data illustrated the weakening financial picture for U.S. households, with a rise in jobless claims corresponding to the highest unemployment rate since the Great Depression.
A measure of business conditions in the Chicago region fell sharply to 35.4 in April, its lowest reading since 2009, according to a report on CNBC. Any reading below 50 indicates worsening conditions. The Chicago PMI is the last of the regional manufacturing indices before the national ISM data is released Friday.
WASHINGTON (MarketWatch) - Personal income fell sharply in March as workers received less compensation, the government said Thursday. Personal incomes dropped 2% in March, while disposable income also fell 2%. Consumer spending slumped 7.5% last month as households stayed at home. Since spending fell faster than income, the amount of money individuals save jumped to 13.1% from 8%. Inflation softened in March, with the headline PCE index rising 1.3% in the past 12 months, down from 1.8% in February The core PCE index that excludes food and energy, meanwhile, slipped to 1.7% rate over the last year from 1.8%.