From the Desk

Recent Economic Commentary

Scott Hofer, Member Strategies Manager- 2/21/2025

U.S. stocks opened lower this morning as investors appear to remain concerned over corporate earnings outlooks and inflationary pressures. All three averages are tracking to end the week lower. In economic news today, the February flash S&P Global Composite PMI dropped to 50.4, nearing contractionary levels and hitting a 17-month low. The decline was due to the Services PMI dropping 3.2 points to 49.7, offsetting Manufacturing PMI growth of 2.0 points to 53.8. The increase in the Manufacturing PMI is likely temporary due to the front-running of tariffs.

Next, existing home sales fell 4.9% in February as high rates and increasing home prices continue to make home ownership challenging. The median existing-home sales price increased 4.8% year-over-year to $396,900, the 19th consecutive month of price increases. Also, the inventory of unsold existing homes grew 3.5% from the prior month, or the equivalent of 3.5 months’ supply at the current monthly sales pace.

Rounding out economic news this morning, the consumer sentiment survey posted a significant 7.0-point decline to 64.7 in February. The decrease was unanimous across groups by age, income and wealth. All five index components deteriorated this month, led by a 19% drop in buying conditions for durables, largely due to fears that tariff-induced inflation is imminent. 

U.S. Treasury yields are lower this morning, with the 2-year Treasury yield down 0.2 bps to 4.27%, the 5-year Treasury yield down 1.6 bps to 4.35% and the 10-year Treasury down 2.3 bps to 4.51%. Advance rates are virtually lower across the curve.