Bond yields traded in a tight range this week, as recent economic data continues to support the Federal Reserve beginning its easing cycle in September. While the economy remains on solid footing, there are signs of a slowing labor market. The unemployment rate has increased from 3.7% to 4.1% over the last six months. Additionally, Core PCE (the Fed’s preferred inflation measurement) continues to show progress toward the 2% target. A slowing labor market and improving inflation metrics could increase the likelihood of rate cuts.

Next week will be particularly important with the July FOMC (Federal Open Market Committee) rate meeting and the release of the July payrolls report. These events will provide further insights into the economic outlook and potential rate changes, offering more clarity on what to expect for the housing market in the coming months.