Correspondent Blog

June nonfarm payrolls rose 147 thousand, easily beating the 110 thousand expected and slightly ahead of the 144 thousand in May (revised up from an initial 139 thousand).  Speaking of revisions, April was revised up by 11 thousand jobs bringing two-month revisions higher by 16 thousand. Private sector job growth was 74 thousand which was…

ADP reported the first month of private sector job losses in over two years this morning and that’s rekindled hopes for a July rate cut, and it also increases the intrigue for tomorrow’s BLS jobs report. Toss in some political intrigue into the mix with the House now attempting to pass what the Senate sent…

In a bid to restart trade negotiations with the US, Canada’s relented on the digital services tax levied against large US tech firms and that has markets in a risk-on mood to start the week, but Treasuries are playing along as well. Away from the trade news, the Senate will try to pass its version…

Investors are wading through the latest personal income, spending, and inflation numbers for May with the market mostly near levels prior to the release.  The inflation numbers, particularly core, were a touch hotter-than-expected while the softer spending numbers evidenced payback for earlier tariff front-running. Incomes fell as a one-time Social Security Fairness Act payment in…

Treasuries open the trading day mixed as the geo-political temperature continues to ratchet down and that has a quiet, slightly risk-on morning developing. President Trump is in Europe meeting with NATO allies and what could have been a contentious gathering appears to be a much more congenial affair. Meanwhile, Fed Chair Powell will be back…

The weekend bombing of several Iranian nuclear facilities by the US has opened another chapter in Middle East tensions with the West, and from an economic perspective the immediate question is if Iran will close the Strait of Hormuz where about 20% of global oil flows daily. So far, the Iranian Parliament has voted to…

Meeting Highlights  As widely anticipated, the Fed held the target rate range at 4.25% – 4.50%.  The updated rate forecast, or dot plot, still has 50bps in rate cuts in 2025, same as the March and December forecasts.  However, the margin is narrower. In March, 11 of 19 participants called for two or more cuts…

Fed Governor Christopher Waller was on CNBC this morning declaring that a rate cut in July is possible. “I think we’re in the position that we could do this and as early as July. That would be my view, whether the committee would go along with it or not.” While I’ve remarked earlier not to…

Treasuries are marking time until the 2pm ET FOMC rate decision announcement, and while no rate cut is expected the Fed will deliver an updated dot plot of rate expectations along with an updated economic outlook on GDP, inflation, and unemployment. Meanwhile, geo-political events continue to influence trading with the Israel/Iran war dominating at present,…

Welcome to Fed Week, where once upon a time it was thought we would have the first rate cut of 2025 delivered this week. Well, like a hot sports prospect that doesn’t quite live up to the hype, we’re left with a meeting that will be known for the updated dot plot and perhaps not…

Welcome to Friday the 13th, where events are already unfolding in an ominous way. Overnight, Israel attacked Iranian nuclear sites, as well as military bases, and targeted high-ranking military and nuclear officials. Iran’s initial response was a limited drone attack, but both sides say there’s more to come. Oil has predictably ramped higher (+8%) and…

Treasury yields are lower following a cooler than expected May CPI report. The release defied predictions that tariff-related costs would start to be seen, but if those costs were in play, it was pretty hard to spot them. Meanwhile, the US and China have agreed to a framework to hammer out a trade deal. The…