Weekly Market Update

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…

Talks between the US and China open today in London on the tariff issue so once again the market will have those headlines to chew on as the week opens, and swirling in the background are the weekend deportation protests in LA. One wonders as the summer progresses and temperatures and tempers get more heated…

May nonfarm payrolls rose 139 thousand, narrowly beating the 126 thousand expected but slightly off the 147 thousand in April (revised down from an initial 177 thousand).  Speaking of revisions, March was also revised down by a sizeable 65 thousand jobs bringing two-month revisions lower by 95 thousand. As we seem to say every month,…

Treasury yields are lower on the heels of a disappointing ADP Employment Change Report for May which adds even more drama to the Friday BLS Nonfarm Payrolls Report. President Trump wasted no time after the release in calling for Fed Chair Powell to begin rate cuts now. So much for a quiet Wednesday! Currently, the…

Treasuries open the week a touch higher in yield even as equities look to open modestly lower.  With the calendar turning to June we’ll get the usual onslaught of updated economic reports leading up to the Friday employment report and in between Fed speak will provide some headlines with Chairman Powell on tap this afternoon….

Markets are wading through the latest personal income, spending, and inflation numbers for April with most at or near expectations.  The inflation and spending numbers were cool, as expected, but a pop in personal incomes (0.8% vs. 0.3% expected) provided a brief uptick in yields. On closer inspection the income gain was due to a…

New Treasury supply looms over the market, but the auctions this week are of the shorter variety (2yr, 5yr, 7yr), offering an easier sell than longer-dated maturities where expanding deficit/supply worries are a bigger part of the buy/no-buy decision. A 5yr auction awaits this afternoon (1pm ET), and coming on the heels of a well-received…