Fed Rate Cut Odds Fall as Inflation Concerns Rise

Stocks and bonds recorded a decline for the week as concerns about inflation added to economic uncertainty. The 10-year and 2-year U.S. Treasury yields surged, leading to a sharp drop in the Bloomberg U.S. Aggregate Bond index. Inflation worries were further fueled by high consumer and producer prices. Despite noisy job reports, the labor market's core health remains strong. In response to higher inflation, markets have revised the odds of a Fed rate cut in June to 60%. The upcoming Fed meeting is anticipated to gauge Chair Powell's stance on recent inflation data.