Weekly Market Update

More Indications of Labor Market Weakness If you’re looking to check boxes on what could force another 50bps cut in November, you got one yesterday. The Conference Board’s September release showed a considerable slide in confidence (from 105.6 to 98.7) and while that rivals the 97ish prints in June and April, it was the labor…

Fed Speak Should Add Color to Last Week’s 50bps Cut  Treasury yields are under pressure as coming supply and early Fed speak is of the dovish variety which is increasing odds that the outsized rate cut last week may be followed by more. That increases odds that a recession, or material slowing, is avoided. The…

So, it was 50bps. What’s Next? Treasury yields are waffling around unchanged this morning, and with an empty economic docket for today investors are likely to keep the market rangebound. The large risk-on move yesterday in equities did bump yields higher, but after a brief foray above 3.75% 10yr yields fell back to the low…

Meeting Highlights  Well, the 25 or 50bps rate cut debate has been settled with the Fed cutting the funds rate by 50bps moving the target rate range to 4.75% – 5.00%.  The updated 2024 rate forecast, or dot plot, now sees nearly another 50bps in rate cuts in 2024 ending the year at 4.375%. That…

Will it be 25 Basis Points or 50? Treasury yields are backing up this morning as the market awaits the FOMC’s rate decision and updated forecasts this afternoon. The debate over 25 or 50 continues so the Fed’s decision will generate volatility but which way? Who knows, but the levels we see this morning aren’t…

Odds of a 50bp Cut Still Increasing  Treasury yields are waffling around unchanged this morning as the market awaits a Fed rate cut on Wednesday, the first since March 2020 (see graph below). The debate over 25 or 50 rages, but the 50 crowd is gathering some momentum and that is aiding Treasury bids in…

Late Financial Commentary Revives Hopes for a 50bp Cut  Treasury yields are lower this morning as the last of the week’s inflation numbers hit with August import/export prices cooler than expected, and late-breaking financial commentary that said the 25 or 50bp decision will, in fact, be a close call. So, the uncertainty is likely to…

The Sore Spots in Inflation Returned in August  Treasury yields are slightly higher this morning as August core CPI came in a bit hotter than expected, dashing hopes of a 50bps cut next week, and the usual sore spots, Owner’s Equivalent Rent and core services, returned as sore spots in August (more on that below)….

Market Rethinks Friday’s Reaction to the Jobs Report Treasury yields are grinding higher this morning as the fears Friday that a slowing jobs market may prompt a recession are given a more sober look today. A rebound in equities is occurring across the globe and stocks are opening higher here as the selling from Friday…

August Jobs Report – A Modest Rebound Signals a 25bps Rate Cut Modest improvement in the labor market from July’s disappointment, seems to argue for a 25bps rate cut later this month. August nonfarm payroll gains were 142 thousand vs. 165 thousand expected and 89 thousand in July (revised down from an initial 114 thousand)….

September Start Echoes August The Treasury market is benefiting from the risk-off start to September that is continuing again this morning. Global markets added to the risk-off tone after watching the action in the US yesterday. A plethora of employment-related reports are due every day this week so any signs of weakness will add to…

July PCE Inflation as Expected, Confirming Fed Pivot to Labor Market Mandate Treasury yields are a bit higher on the short end this morning as the Fed’s preferred inflation measure came as expected but that dented the odds of a 50bps rate cut vs. 25bps, at least until we see the August jobs report next…