Treasury yields rose once again this week, reaching their highest levels in over a month despite Congress departing for their summer recess without agreeing on additional fiscal stimulus. The lack of an additional stimulus package overshadows the recent improvements in the labor market.
Although the number of Americans continuing to receive unemployment insurance has declined by nearly 10 million from its early-May peak, 15.5 million remain on unemployment and their benefits were drastically reduced following the 7/31 end of the federal unemployment add-on benefits. The majority of economic data released this week shows a similar situation: the economy is posting reasonable improvements over prior months, but remains weak overall. Going forward, the monthly gains are likely to be smaller in the absence of a coronavirus vaccine and additional fiscal stimulus.