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By Matt Harris, CFA
Senior Portfolio Advisor
HilltopSecurities Asset Management
Financial markets are relatively quiet today as investors continue to monitor negotiations between the U.S. and Iran. Iran is expected to send a response to the U.S. via Pakistan in the next couple days which will give insight to topics such as the current financial sanctions on Iran and a moratorium to Iran’s uranium enrichment program.
Rates remain range‑bound, with Fed policy expectations largely flat through mid‑2027. At one point this week, futures priced roughly 10 basis points of tightening through the July 2027 FOMC meeting, but that view did not hold for long. The 2‑year Treasury yield continues to bounce around the 3.90% level.
Last month’s Fed meeting reinforced “rates on hold” narrative, however four dissents drew attention as Chair Powell prepares to transition into a Governor role. Boston Fed President Susan Collins was on the tape today supporting colleagues who dissented over language in the post‑meeting statement suggesting the Fed would eventually resume rate cuts. While Collins is not a voting member this year, her comments underscore a broader move within the FOMC away from easing bias.
Meanwhile, the effective closure of the Strait of Hormuz continues to drive volatility in the energy sector. The average price of a gallon of gasoline in the U.S. topped $4.50 this week, amplifying inflation concerns. A new study from the New York Fed published Wednesday noted that higher fuel costs are disproportionately weighing on low‑income households, reinforcing the uneven impact of inflation.
Also today, the NY Fed’s 1-year inflation expectations came in higher than anticipated at 3.64%, marking the highest we’ve seen since September 2023, when they were declining from a high level created by the Covid-19 pandemic.
On the jobs front, employment remains resilient. Initial jobless claims slowed to 200k workers filing for unemployment benefits in the week ending April 25, near the lowest levels in decades. The four‑week moving average fell to its lowest point in more than two years, while continuing claims have trended lower since mid‑2025. Hiring momentum has clearly slowed, reinforcing concerns that the labor market is losing steam, yet employers are not meaningfully cutting jobs. Labor hoarding with limited layoffs, and benefit exhaustion continue to suppress claims.
Looking forward, markets will focus on tomorrow’s release of the April jobs report. Nonfarm payroll growth is expected to slow to 65k down significantly from March’s 178k gain, while the unemployment rate is forecast to hold at 4.3% and labor force participation to tick slightly higher. Later in the morning, the preliminary May University of Michigan sentiment reading is expected to remain at a record-low level at 49.5. The focus will shift next week to inflation, with the April CPI report scheduled for release on Tuesday.
About Scott McIntyre, CFA
As HilltopSecurities Asset Management’s Co-Head of Investment Management, Scott McIntyre specializes in investment management services and is responsible for the management, oversight and trade supervision of more than $30 billion in institutional fixed income assets for HilltopSecurities’ public sector municipal clients. Scott also provides investment advice and consulting, reviews local government investment policies, formulates overall investment strategies, evaluates account performance and oversees the day-to-day operations. He is a member of the Chartered Financial Analyst (CFA) Institute and a CFA Charterholder, a two-term advisor to the GFOA Treasury and Investment Management (TIM) committee, a Registered Investment Advisor, and holds FINRA Series 7, 24, 63, and 65 licenses.
About Greg Warner, CTP
As HilltopSecurities Asset Management’s Co-Head of Investment Management, Greg Warner specializes in investment management services and is responsible for the management and oversight of more than $30 billion in institutional fixed income assets for HilltopSecurities’ public sector municipal clients. Greg coordinates all client services and portfolio management duties, including security evaluation and portfolio analysis, trading, investment reporting, board presentations, and monitoring of broker-dealer relationships. He is an advisory committee member to the Texas Association of Counties, a member of the Government Treasurers’ Organization of Texas (GTOT), a Registered Investment Advisor, a Certified Treasury Professional (CTP) and holds FINRA Series 7, 63, and 65 licenses.
About Matt Harris, CFA
As HilltopSecurities Asset Management’s Senior Portfolio Advisor, Matt Harris specializes in investment management services for public sector municipal clients. He developed his experience in the banking industry, supporting balance sheet management, interest rate risk analysis, liquidity planning, and investment strategy implementation. At HilltopSecurities, he works closely with clients to develop and implement customized investment strategies, oversees account documentation and reporting, and assists clients with the public funds depository review process, including competitive RFP evaluations. Harris is a member of the CFA Institute and a CFA Charterholder, a Registered Investment Advisor, and holds FINRA Series 7, 63, and 66 licenses.
The paper/commentary was prepared by HilltopSecurities (HTS). It is intended for informational purposes only and does not constitute legal or investment advice, nor is it an offer or a solicitation of an offer to buy or sell any investment or other specific product. Information provided in this paper was obtained from sources that are believed to be reliable; however, it is not guaranteed to be correct, complete, or current, and is not intended to imply or establish standards of care applicable to any attorney or advisor in any particular circumstances. The statements within constitute the views of HTS as of the date of the document and may differ from the views of other divisions/departments of Hilltop Securities Inc. and its affiliates. In addition, the views are subject to change without notice. This paper represents historical information only and is not an indication of future performance. This material has not been prepared in accordance with the guidelines or requirements to promote investment research, it is not a research report and is not intended as such. Sources available upon request.
Hilltop Securities Inc. is a registered broker-dealer, registered investment adviser and municipal advisor firm that does not provide tax or legal advice. HTS is a wholly owned subsidiary of Hilltop Holdings, Inc. (NYSE: HTH) located at 717 N. Harwood St., Suite 3400, Dallas, Texas 75201, (214) 859-1800, 833-4HILLTOP.