Economic data is plentiful this week with Durable Orders easily beating expectations in June as data continues to roll in on the positive side. In addition, housing, consumer confidence and sentiment, the inflation reading Core PCE and consumer spending will be released. All eyes will be glued to the first reading Q2 2020 Gross Domestic Product where it is expected to plunge by at least 30% due to the pandemic induced shutdown.
The Fed's monetary policy report will be released on Wednesday at 2:00 p.m. ET. There is a zero percent chance of a change to the short-term Fed Funds Rate, but what the statement conveys and what Fed Chair Powell will say at his 2:30 p.m. ET press conference could impact the markets. The Federal Funds Rate is the interest rate at which depository institutions trade federal funds (balances held at Federal Reserve Banks) with each other overnight.
Just some quick facts regarding Treasury securities. Treasury notes are interest-bearing securities that have a fixed maturity of not less than 1 year and not more than 10 years from the date of issue. The Treasury currently issues notes in 2, 3, 5, 7, and 10-year maturities. Treasury notes pay interest on a semi-annual basis. When a note matures, the investor receives the face value. Treasury bills are short-term securities maturing in one year or less. Bills are sold at a discount or at par (face value). When a bill matures, the investor receives the face value. The difference between the purchase price and the face value equals the interest earned. Treasury bonds are interest-bearing securities with maturities over 10 years. Treasury bonds pay interest on a semi-annual basis. When a bond matures, the investor receives the face value.