IGA Capital Weekly Market Update

Joshua Hawley, August 18th, 2025

Market Overview

U.S. equity markets advanced for the week ending August 15, 2025. The

S&P 500 saw a gain of 2.2% over the last month, the Dow Jones rose by 0.8% over the same period, and the Nasdaq jumped 3.2%. The market is pricing in a series of future rate cuts, with the implied policy rate projected to drop from its current level of 4.25% to 3.25% by July 29, 2026. The market's projection for the Fed Funds Effective Rate is for it to fall to approximately 3.00% by December 2026, which is lower than the Federal Reserve's own dot plot projection of 3.375% for the same period.

Fixed Income and Sovereign Yields

The 10-year U.S. Treasury yield is currently at 4.29%. It has decreased by 13 basis points (bps) over the past month, but is up 41 bps over the last year. The 2s/10s Treasury spread is at 0.55% and the 5s/30s spread is at 1.08% as of August 18, 2025. This indicates a steepening yield curve. The 1M Term SOFR is at 4.35% as of August 18, 2025. Other sovereign bond yields as of April 28, 2025, were: Canada at 3.45%, Germany at 2.75%, Japan at 1.56%, and Australia at 4.27%.

Commodities and Digital Assets

The gold market has continued its strong performance, with its price increasing to $3,348.06 as of August 18, 2025, representing a 36.3% rise over the last year^. Silver also performed well, reaching $38.13, a 34.5% increase year-over-year. Oil prices, however, fell by 4.5% over the past month to $63.30. Bitcoin has shown notable strength this week, with its price rising above $122,000. It continues to be influenced by strong inflows into crypto investment products, and broader market sentiment around future monetary policy.

Inflation and Economic Data

Key inflation measures present a mixed picture. The U.S. annualized

Core CPI is at 3.10% for July 2025, up from 2.90% in June. However, the Headline CPI remains steady at 2.70%. The Producer Price Index (PPI) saw a significant one-month increase of 0.90%, reaching 3.30% in July. The U.S. Gross Domestic Product (YoY) is 2.00%, with the unemployment rate at 4.20%.

IGA Capital Perspective

The markets are currently navigating a complex environment. The combination of strong equity performance and rising bond yields highlights a tug-of-war between growth optimism and lingering inflation concerns. We continue to prioritize a data-driven approach to identify and capitalize on opportunities, particularly in project finance and trade-linked funding, where our expertise is most valuable in such a dynamic landscape.

Footnotes and Disclosures:

Source: Bloomberg, Walker & Dunlop

Data on Fed Funds Rate Target Probabilities: CME Group

Information on SOFR Interest Rate Caps: Chatham Financial

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