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Economic Update <br /> <br /> <br /> <br />Recent economic data continues to suggest positive but below trend growth this year.Although the pace of job growth is moderating,labor <br />markets remain solid,and the U.S.consumer has demonstrated resiliency. Inflationary trends are subsiding, but core levels remain well <br />above the Fed’s target.Given the cumulative effects of restrictive monetary policy and tighter financial conditions,we believe the economy <br />will gradually soften and the Fed will remain data dependent as they tread cautiously going forward. <br />As anticipated at the July meeting,the Federal Open Market Committee voted unanimously to raise the Federal Funds rate by 0.25%to a <br />target range of 5.25 -5.50%,the highest level in over 20 years.Fed Chair Powell maintained that the FOMC will remain data dependent <br />going forward,and that they do not anticipate a recession,leaving the option open for the possibility of additional rate hikes in the future if <br />needed. <br />The yield curve remained inverted in August. The 2-year Treasury yield decreased 1 basis point to 4.87%,the 5-year Treasury yield rose 8 <br />basis points to 4.26%,and the 10-year Treasury yield increased 15 basis points to 4.11%.The inversion between the 2-year Treasury yield <br />and 10-year Treasury yield narrowed to -76 basis points at August month-end versus -92 basis points at July month-end. The spread <br />between the 2-year Treasury and 10-year Treasury yield one year ago was -30 basis points. The inversion between 3-month and 10-year <br />Treasuries narrowed to -134 basis points in August from -145 basis points in July. The shape of the yield curve indicates that the probability <br />of recession persists. <br />3