The Fed’s Dual Mandates Face Increasing Tension
The light data week rolls on and that allows the focus to build on Jackson Hole and what we may learn this Friday. Fed Chair Powell will deliver the keynote address, and while the market wishes for clarity akin to the mountain water surrounding the venue, we’re not likely to get that crystal clear insight…
Quiet Data Week Puts Focus on Jackson Hole
It’s a light week for data and that will put even more focus on the Jackson Hole central bank symposium convening later this week. Fed Chair Powell will deliver the keynote address on Friday, and the thinking is he’ll provide a bit more color regarding a possible rate cut at the September meeting, but probably…
The Consumer Fails to Fold
It’s another risk-on day in equities (Dow indicated up 270 points), and that has Treasuries standing in place as we open. There’s an element too of investors still pondering the true inflationary impact of yesterday’s PPI report. While some of the heat from the robust PPI print can be explained as less inflationary and more…
July CPI was OK, but Challenges Abound for Future Improvement
Treasury yields are drifting lower this morning as rate cut fever takes hold and equity markets are running with that mood as well. The CPI report yesterday was greeted as greenlighting a rate cut in September with futures markets now putting decent odds (>50%) of three cuts by year-end. While we weren’t that enthusiastic about…
Inflation Week Arrives as a September Rate Cut Looms
Treasury yields are a tick or two higher this morning as a modest risk-on mood has Treasuries a bit on the defensive as the week opens. After a rather dull week nearly devoid of data, this week brings the return of Inflation Week with eyes on any additional passthrough of tariff costs, and whether core…
2nd Quarter Productivity Improves but Continuing Claims Increase Too
Treasury yields are a tad higher this morning as the last of the new Treasury supply was sold yesterday to tepid demand. The 30-year auction followed the trend of the 10-yr and 3-yr with mediocre at best results, but it’s interesting that the less than robust reception wasn’t met with more selling, and hence higher…
ISM Services for July also Hints at Slowing Economy
Treasury yields are listlessly ticking higher but it’s more about flows and positioning for the 10yr auction than any new catalyst. The Treasury will sell $42 billion in 10yr notes today and that should keep yields on a short leash until past the 1pm ET announcement. Meanwhile, President Trump has said he will announce a…
Jobs Report and Personnel Fallout to Continue this Week
Treasury yields continue to drift lower in the wake of the weak jobs report and the personnel changes that are coming. The data flow slows considerably this week opening centerstage for DC theatrics to keep markets focused on work instead of the waning days of summer. As mentioned, economic releases will be few, but following…
July Jobs Report Misses and Big Downward Revisions Makes it Worse
July nonfarm payrolls rose only 73 thousand, missing the 105 thousand expected but slightly ahead of the 14 thousand increase in June (significantly revised lower from an initial 147 thousand increase). Speaking of revisions, May was revised down by 125 thousand jobs bringing two-month revisions to an astounding 258 thousand. Private sector job growth was…
As Expected, Fed Keeps Rates Unchanged but Notes Moderating Growth
Meeting Highlights As expected, the Fed kept the funds rate range unchanged at 4.25% – 4.50%, with two Fed governors dissenting (Waller and Bowman). The double dissent from governors is the first since 1993. Truth be known, It’s not really surprising the pair dissented as they’ve been increasingly vocal about cutting now, and it does…
2nd Quarter GDP Precedes FOMC Announcement
Treasury yields are trading a bit higher after this morning’s new data headlined by 2nd Quarter GDP coming in at 3.0% beating most estimates, but with some nagging questions. A reversal of the 1st quarter import surge led to the rebound. As we march through the thicket of first-tier data on offer this week, the…
Trade Deal with Japan has Markets in Risk-on Mood
The week of light data rolls on but at least we have trade deals to talk about. The announced deal between Japan and the US on tariffs has markets in a risk-on mood and that has Treasuries on the back foot, but after a five-day rally in 10yr notes a little breather can be expected….