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The inflation data within the Q1 2024 GDP and the March Personal Consumption Expenditures (PCE) reports continued to show sticky price levels which caused Treasury yields to rise during the week. Overall, 10yr and 30yr Treasury yields increased 5 and 6 bps, respectively. also moved higher last week with yields rising 6-7 bps across the curve. However, municipals continue to outperform the treasury market and municipal ratios sit near all time lows. Inflows returned to municipal bond funds as $200 million was added to funds in the most recent week. Municipal bond funds have experienced inflows in eight of the last ten weeks. Hotter than expected inflation reports in April have led the market to recalibrate its rate cut expectations for 2024. Within a span of three months, markets have shifted from pricing five rate cuts to just one. The Fed will gather for a FOMC meeting this week. While Fed action is not anticipated at the meeting, markets will be watching closely to see if the central bank hints at the possibility of a rate hike at future meetings in order to move inflation towards the Fed’s 2% target.