US industrial activity slumped 0.4% in May, well below expectations. The monthly decline reverses April’s bounce and throws cold water on the notion that output was heading toward a summer revival. The manufacturing component fell, too, posting a 0.4% drop that pushed this slice of output into the red in year-over-year terms for the first time this year, according to this morning’s update from the Federal Reserve.
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The benchmark 10-year Treasury yield yesterday remained at its lowest level since late-2012, according to daily data published by Treasury.gov through June 14. For the second consecutive day, this widely followed rate held at 1.62%–more than 60 basis points below the level at the start of the year. The implication: the bond market is expecting that the Federal Reserve will leave interest rates unchanged in today’s FOMC meeting—and perhaps for months to come.
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