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Committee briefed on Fed projections, 2‑year Treasury rise and inflation drivers
Summary
Staff described how FOMC projections and global events — including the US–Iran conflict and energy-market disruptions — have pushed the 2‑year Treasury yield higher, and reviewed Seattle-area CPI data showing food and energy as major drivers.
Adrian Gonzales told the committee the yield curve has shifted in early 2026 and that the 2‑year Treasury has risen to levels not seen since July 2025, linking that movement in part to geopolitical uncertainty. "The increase in 2 year treasury is large largely caused by increased uncertainty around the conflict with Iran and what it will mean for the global economy," Gonzales said during the presentation.
Gonzales summarized recent FOMC activity and the federal funds rate, noting the March 18 meeting where the FOMC held the target range at 3.5–3.75% after three prior quarter‑point cuts. He reviewed the March 18 dot‑plot projections — which at that time implied one or more future cuts — and warned the committee that projections shifted after recent global events; he noted updated projections and a new dot plot would be released after the June 17 meeting.
On local inflation measures, Gonzales cited Seattle CPI numbers: a 1.8% rise over two months and a 3.9% year‑over‑year increase, with food and energy as notable contributors (food year‑over‑year ~4.8%; energy year‑over‑year ~9.1%). Committee members responded that while the city’s current position was steady, rising rates or persistent inflation could increase construction costs and budget pressure later in the year.
