Interest rate and bond markets seemed calm, with Treasury yields hovering around Friday’s close. That’s even as Atlanta Fed boss Raphael Bostic sent a hawkish note late Friday by saying he now expects just a single quarter-point interest rate cut this year instead of the two he had projected earlier, citing persistent inflation and strong economic data.
The big economic report of the week comes on Friday with the release of the Fed’s favored PCE inflation gauge for February – but Wall St stock exchanges will be closed that day and won’t get a chance to react until next week.
And there was relief that another threatened government shutdown was averted over the weekend – and the issue put aside for six months. With two-year notes under the hammer again later on Monday, the main Treasury market volatility index has fallen to its lowest in more than two years.
Congress early on Saturday overwhelmingly passed a $1.2 trillion budget bill, keeping the government funded through a fiscal year that began six months ago. Key federal agencies including the departments of Homeland Security, Justice, State and Treasury, which houses the Internal Revenue Service, will now remain funded through Sept. 30.
Elsewhere in domestic politics, former U.S. President Donald Trump faces a Monday deadline to post a bond covering a $454 million civil judgment against him in a New York state case, after a judge found he had overstated the value of his assets.
And in geopolitics, President Joe Biden and Japanese Prime Minister Fumio Kishida will agree next month to tighter military cooperation, including talks on the biggest potential change to Washington’s East Asia command structure in decades.
