Treasury yields rose last week, with 10-year and 30-year yields increasing 10 bps and 5 bps, respectively. The municipal yield curve steepened slightly, with the 10-year yield rising by 1 bp and the 30-year yield increasing by 4 bps. Municipal bond funds experienced $426 million of inflows, marking the sixth consecutive week of inflows. The May jobs report was released on Friday and indicated 139k jobs added—slightly above expectations. However, May’s job growth is below both the 1- and 2-year monthly averages, suggesting a labor market that is no longer gaining momentum. Meanwhile, other economic releases show conflicting data. While April job openings modestly rose by 191k to 7.39 million, remaining near their lowest level in four years and indicating continued stability, the number of Americans filing new applications for unemployment benefits surged to its highest level in eight months, indicating a potential shift in labor market dynamics amid escalating economic pressures from tariffs.

Treasury yields fell last week, with 10-year and 30-year yields decreasing 10 bps and 12 bps, respectively. The municipal yield curve followed to a lesser extent, with the 10-year yield falling by 4 bps and the 30-year yield decreasing by 2 bps. Municipal bond funds experienced $526 million of inflows, marking the fifth consecutive week of inflows. The core PCE price index was released on Friday and decreased to 2.5% YoY, down from 2.7% YoY. This represents the smallest annual advance in over four years. Supercore PCE inflation, which is monitored closely by the Fed, dropped sharply below 3% for the first time in more than four years. Weak real spending growth and a softening labor market could prompt the Fed to consider rate cuts sooner than the market currently anticipates. Market participants will be focused on the April jobs report, which will be released on Friday, as well as further updates on trade negotiations with China after Secretary Bessent described talks with Beijing as “a bit stalled” last week.