Correspondent Blog

Doves Take Flight at Jackson Hole The Treasury market is trading in the afterglow of Powell’s dovish pivot at Jackson Hole, and with another week of limited data it should be a rather range bound week. We talk more about the Jackson Hole revelations below but suffice it to say the rate-cutting cycle will begin…

Powell Likely to Signal Rate Cuts to Begin in September We’ve arrived at Friday with investors waiting on Powell’s Jackson Hole address at 10am ET. Not much else is on the docket today, so the stage is cleared for Powell and his comments (more on that below). Currently, the 10yr note is yielding 3.85%, down…

BLS 2023 Payroll Revisions and FOMC Minutes on Tap for Today We’ve arrived at mid-week with investors waiting on Powell’s Jackson Hole address on Friday, so the range trade remains in place. We do get, however, some important items today with the BLS payroll revisions for 2023 and the minutes from the July 31 FOMC…

Fed Communication Front and Center This Week After a week filled with inflation data, this week is light on new economic news but that leaves the stage for Fed speak and it should provide for tradable headlines. The big event in that regard will be Fed Chair Powell’s address at the Jackson Hole Economic Policy…

Data This Week Points to a 25bps September Rate Cut After a solid bout of data yesterday that dispelled any notion that the consumer was retrenching, yields jumped higher with the 2yr back over 4% and the 10yr approaching that level. In fact, this week has produced solid data that has pushed odds of a…

July CPI Keeps September Rate Cut in Play After a knee-jerk back up in yields following the CPI report, yields are dipping lower again as traders see the CPI report as not so bad after all. Frankly, CPI came as expected, but investors may have been hoping for more softness. Nevertheless, it should be good…

Inflation and Retail Sales Headline this Week’s New Information  Treasury yields are waffling around unchanged this morning as the lack of a weekend catalyst has allowed the dust to continue to settle from the volatility of early last week. This week provides plenty of new inputs for Fed policy as inflation data will be followed…

Markets Rethinking Recession Risk Treasury yields are edging lower this morning after they popped yesterday in the wake of better-than-expected initial jobless claims reducing some of the recession angst. Equity futures are lower into the open and that modest risk-off tone before a weekend, and after a big runup yesterday, is not surprising.  There’s no…

A Tentative Calm Returns to the Markets Treasury yields continue to drift higher this morning as the lack of new recession-related catalysts, and reduced volatility, contribute to a much calmer market than was the case on Friday and Monday. The lack of potential market-moving data today should hopefully continue the trend. Currently, the 10yr note…

Markets Continue to React Dramatically to Soft Jobs Report Treasury yields are lower again this morning as the rout in equities from Friday’s soft jobs report continues this morning and is spreading globally. The moves are nearing historic levels and are prompting calls from some quarters for the Fed to employ an emergency cut, but…

July Jobs Report Reveals Acceleration in Labor Market Softening Nonfarm payroll gains for July were 114 thousand vs. 175 thousand expected and 179 thousand in June (revised down from an initial 206 thousand). May was revised lower by 2 thousand jobs, bringing the two-month revisions to -29 thousand and that continues a year-long trend of…

Meeting Highlights  As expected, the Fed kept the funds rate range unchanged at 5.25% – 5.50%, and while the tone of the statement was less hawkish and didn’t overtly hint at a September rate cut, Powell’s post-meeting press conference did. They did, however, make some substantive changes to the statement that indicates the focus going…