This week was all about interest rates. The yield on the 10-year U.S. Treasury rose to the highest level since 2007, topping 4.5 percent after running up from about 4.1 percent at the start of the month. That is a big jump, driven by a growing market realization that the Fed is serious about keeping rates higher for longer.

Each week, we break down the latest U.S. economic reports, including what the results mean for the overall health of the economy. Here, you will find how economists’ forecasts compare with actual results, key takeaways to consider, as well as a list of what’s on tap for the week ahead.

I thought this was going to be an easy week. Clearly, we would be talking about inflation, right? And we will, but we also should discuss the UAW strike and consumer confidence. So, let’s get right to it.

My colleague Sam Millette, director, fixed income on Commonwealth’s Investment Management and Research team, helped me put together this month’s Market Risk Update. Thanks for the assist, Sam! Let’s take a closer look.

Each week, we break down the latest U.S. economic reports, including what the results mean for the overall health of the economy. Here, you will find how economists’ forecasts compare with actual results, key takeaways to consider, as well as a list of what’s on tap for the week ahead.

What mattered this week? Well, on top of it being a short week, there simply wasn’t much happening. The one piece of economic data that mattered, the ISM Services survey, surprised to the upside. This result indicated that service businesses, on the whole, are not only still in expansion mode but are even feeling better. That is good news from an economic perspective and, on top of the last jobs report, signals that the economy continues to grow.

August saw modest market pullbacks across the board, as investors were nervous about risk. The U.S. indices were down by low single digits, with the Nasdaq doing the worst. International markets also pulled back—developed markets were down slightly more than U.S. markets, and emerging markets performed worst of all. Even fixed income declined, as higher interest rates drove the U.S. Aggregate Bond Index down slightly. Financial markets spent the month in a risk-off mode, hurting riskier investments like tech stocks and emerging markets at the expense of more boring ones.

My colleague Sam Millette, director, fixed income on Commonwealth’s Investment Management and Research team, helped me put together this month’s Economic Risk Factor Update. Thanks for the assist, Sam! Let’s take a closer look.

U.S. indices were down by low single digits in August, with the Nasdaq doing the worst. International markets pulled back, and fixed income was down. This market performance reflected the underlying economy. Business and consumer confidence slowed, while inflation showed signs of ticking up again.

Each week, we break down the latest U.S. economic reports, including what the results mean for the overall health of the economy. Here, you will find how economists’ forecasts compare with actual results, key takeaways to consider, as well as a list of what’s on tap for the week ahead.