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Yields Close Quarter on Down Note

Yields edged lower during the final week of the quarter as stocks moved higher, with the S&P 500 nearing a 6.8% gain for the month and a 3% quarterly advance.  A series of economic releases on Friday painted a positive picture for the U.S. economy, with May personal income, spending, and inflation data supporting the consumers' ability to drive the U.S. economy in the face of declining prospects for the domestic manufacturing sector and more broadly, global growth. 

The FOMC will receive one more reading on inflation prior to their next meeting, with the June PCE data due the day before the 7/31 meeting.  Fed Chair Powell indicated earlier this week that the low levels of inflation, which previously were viewed as transitory, "may be more persistent than we had hoped."  However, the Powell-led Federal Reserve seems to be navigating monetary policy towards a more market-guided approach, with less reliance on the traditional guideposts of full employment and stable inflation.

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