The Daily Advisor: June 17, 2024

Three Things To Know Today 

1. Register for Today’s Community Impact Advance Webinar
We recently announced our Community Impact Advance pilot program launching this July, our latest solution designed to amplify community impact. To learn more, attend today’s webinar taking place at 10 a.m.

2. Holiday Hours | Juneteenth
In observance of Juneteenth, FHLBank Chicago and the Mortgage Partnership Finance® (MPF®) Program are closed on Wednesday, June 19.

3. Tell Your Story – We Want to Hear From You
We want to share how you are leveraging our products and programs to make a difference in your communities so we can celebrate and elevate the great accomplishments we make together. Visit fhlbc.com to see examples of how other members are making an impact and submit your information in the form share your story with us!

Market Commentary

Treasuries rallied and equities finished the day mixed as the markets digested a weaker-than-expected preliminary reading for the June University of Michigan Consumer Sentiment Index. Yields stuck to a tight trading range throughout the day, and the long end outperformed shorter maturities. The 2s10s spreads widened by 3 basis points, to -47 bps. According to the CME FedWatch tool, there is a 69.2% chance of a 25bps rate cut in September's Federal Open Market Committee (FOMC) meeting, and a 71.2% chance of an additional 25bps rate cut in December.

Export prices in the US fell 0.6% from the previous month in May 2024, down from an upwardly revised 0.6% increase in the previous month and compared with market expectations of a flat reading, being the first monthly decline since December 2023. Export prices are up 0.6% year-over-year. On the other hand, import prices are down 0.4% from the previous month in May 2024, the first price decline of the year, after a 0.9% gain in April and compared to market expectations of a 0.1% increase. Import prices are up 1.1% year-over-year for the second month in a row, the highest since December 2022.

The University of Michigan consumer sentiment for the US fell for a third straight month to 65.6 in June 2024, the lowest since November, from 69.1 in May and well below forecasts of 72. Consumers perceive few changes in the economy from May and remain concerned about inflation and the current outlook for lower interest rates. It is likely that consumers are also facing heightened awareness of the upcoming election cycle and intensifying political climate.


Disclaimer

The data and valuations provided in this document are for information purposes only and are provided as an accommodation and without charge. The Federal Home Loan Bank of Chicago makes no representations or warranties about the accuracy or suitability of any information in this document. This document is not intended to constitute legal, investment, or financial advice or the rendering of legal, consulting, or other professional services of any kind.

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