Interest rates have really been trying to move lower over the last two weeks, with pricing improving about 100bps since the lows of May 26th. However, today the Fed auctioned off $72B in three and ten year notes and the reception was pretty lousy. It seems that investors are reticent to make any big moves ahead of CPI and PPI numbers over the next two days, the Fed Monetary Policy Statement on Wednesday, and the Philly Fed and Retail Sales on Thursday.
The Producer and Consumer Price Indices are expected to come in lower than last month, easing inflation and rate-hike fears. Philly Fed Retail Sales are also anticipated to show signs of slowing growth, and the Fed is said to be taking a pause this time around, a welcome change from their last ten consecutive meetings which were punctuated at the end by a rate hike. But for now, the near-term forecast for interest rates is partly cloudy at best.