Fixed Income Daily Morning Economic Report, 5-29-26

5-29-26 Fixed income markets ease modestly off the post-Axios peaks on Thursday and continue to await the assessment of US President Trump on the MOU(Memorandum of Understanding, they couldn't just call it a peace deal?). Note, a recent dip in energy has provided some modest support. USTs are at 109-26+ in the middle of a 109-23 to 109-30 range, having faded from Thursday's 110-07+ WTD top while SFRZ6 is trading 96.165 having been in a 96.15 to 96.17 range, reducing the hike implication to 78% by year end. The docket for the US ahead is primarily waiting for Trump to comment on the MOU situation, and as such USTs may be relatively rangebound until an update occurs. That aside, we look for remarks from various Fed speakers. This morning, Kashkari (2026) said it is unclear what the future path of policy is and, in the context of April's PCE, that it would be premature to conclude they need to tighten immediately.

On the docket today; 5:30 am Kansas City Fed President Jeff Schmid speech says that his primary concern is inflation, which is "too hot" 6:45 am San Francisco Fed President Mary Daly TV appearance 7:30 am Advanced U.S. trade balance in goods April -- $-87.9B 7:30 am Advanced retail inventories April -- 0.7% 7:30 am Advanced wholesale inventories April -- 1.3% 8:10 am Fed Vice Chair for Supervision Michelle Bowman speech 8:15 am Philadelphia Fed President Anna Paulson speech 8:45 am Chicago Business Barometer (PMI) May 50.8 49.2 11:40 am San Francisco Fed President Mary Daly speech

Video link for Fixed Income Morning Report: https://youtu.be/Fe1zS1n_Sfs