Rates fall to recent lows. Tariff threats from President Trump during the last week of February overshadowed hot inflation releases throughout the month. Term rates fell ~30bps to end at a year-to-date low.
Economic data flash yellow lights. Retail spending and service sector activity contracted in February, while consumer confidence worsened amid heightened uncertainty. The results highlighted emerging risks to the narrative of U.S. economic "exceptionalism."
Three cuts now priced in for 2025. Trade war concerns have accelerated the futures-implied timeline for Fed cuts. A major pivot from earlier last month, when it was contemplated whether the Fed would cut rates at all during 2025.
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