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Big Yield Gains as Data Shows Consumer Spending

Yields posted a sizable jump this week, as the 10-year Treasury reached 3.11% before retreating a bit at weeks' end.  The advance also pushed mortgage rates higher, with the national average 30-year mortgage rate hitting 4.56%, near the highest levels since 2014.  Shorter-dated yields did not climb as much, causing the yield curve to steepen.  Expectations of additional Fed rate increases this year have many market participants concerned about the possibility of the yield curve inverting (where shorter yields are higher than longer yields) and this week's move temporarily alleviated some of those concerns.  The gains were primarily due to strong economic data and corporate earnings. 

On the data front, the calendar was led by a strong advance in retail sales as consumers spent more despite higher fuel prices.  The housing market continued to demonstrate strength, as housing starts and building permits both posted strong numbers (despite registering monthly declines).  Higher mortgage rates may eventually impact the sector, but optimism is currently strong

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