IGA Capital Weekly Economic Brief
- Joshua Hawley
- Feb 25
- 2 min read
February 25th, 2025
Joshua Hawley
Market Overview
Financial markets remain highly reactive to policy developments, with economic data taking a backseat to geopolitical shifts and regulatory changes. Volatility persists as investors navigate evolving policy landscapes. However, as macroeconomic conditions stabilize, market focus is expected to return to key economic indicators. This week, attention will be on the Core PCE Price Index, the Federal Reserve’s preferred inflation gauge, alongside GDP and consumer confidence data.
Key Economic Events This Week
Treasury Auctions: 2-, 5-, and 7-year Treasury notes
Inflation & Growth Data: Core PCE, GDP, Personal Income, Consumer Confidence
Federal Reserve Commentary: Multiple Fed speakers
Economic Calendar:
Monday, 2/24 – Chicago Fed National Activity Index; 2-year Treasury Auction ($69B)
Tuesday, 2/25 – Case-Shiller Home Price Index; Consumer Confidence; Richmond Fed; 5-year Treasury Auction ($70B)
Wednesday, 2/26 – New Home Sales; 7-year Treasury Auction ($44B)
Thursday, 2/27 – Jobless Claims; GDP (Q4); Pending Home Sales; Fed Speeches (Schmid, Barr, Bowman, Hammack, Harker)
Friday, 2/28 – Personal Income & Spending; Core PCE (YoY expected at 2.6%); Chicago PMI
Next Week: Jobs Week (JOLTS, ADP, Jobless Claims, Non-Farm Payrolls)
Treasury yields have remained in a defined range throughout February but have trended slightly lower since mid-January. Last week’s movement saw:
2-year yield: 4.20% (-6 bps)
10-year yield: 4.43% (-5 bps)
Yield Curve (2s10s): Steepened by 1 bps to 23 bps
Current 10-year yield: 4.44% (+1 bps this morning)
Federal Reserve & Interest Rates
The Core PCE Price Index, a key indicator for the Fed, is expected to show a 2.6% YoY increase. Despite signs of cooling inflation, persistent price pressures—particularly in housing and services—suggest the Fed will maintain its wait-and-see approach before considering rate cuts. Investors will closely monitor Fed speeches for signals on future monetary policy.
Market Expectations for Rate Cuts (Implied Fed Funds Rate):
March 19th: 4.315%
May 7th: 4.246%
June 18th: 4.144%
July 30th: 4.077%
September 17th: 3.983%
December 10th: 3.866%
The market is currently pricing in 46 bps of easing by the end of 2025, up from 39 bps last week. However, any signs of inflationary persistence or labor market resilience could push rate cuts further out on the horizon.
Outlook for IGA Capital Clients
The evolving rate environment presents both challenges and opportunities for structured finance and corporate funding strategies. IGA Capital remains focused on helping clients navigate interest rate risks, optimize capital structures, and leverage global financing sources amid changing economic conditions.
For tailored financial solutions, connect with IGA Capital today.
+971 50 764 0788
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