U.S. Treasury yields sold off in May as concerns over government spending and the budget deficit weighed on markets. The 10-year U.S. Treasury yield rose 23 basis points (bps) to close the month at 4.41%. In addition, the FOMC raised concerns on both sides of their dual mandate as hard and soft data have decoupled. A lack of further deterioration in labor markets and limited progress on inflation allowed the Fed to remain on hold in May.

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