Correspondent Blog

Strong Job Growth Continues and Wage Gains Accelerate Nonfarm payrolls increased 528 thousand with those gains continuing to be widespread while the unemployment rate dipped a tenth to 3.5%. Expectations were for 250 thousand jobs and the increase was well above June’s 398 thousand new jobs. It’s the highest monthly gain since February’s 714 thousand…

Fed Pushes Back on Thoughts of a Dovish Pivot   Yesterday, a pair of Fed officials firmly pushed back on the notion that Fed Chair Powell’s comments after last week’s 75bps rate hike represented something of a pivot to a more dovish Fed in upcoming meetings.   San Francisco Fed President Mary Daly and Chicago…

In wrestling, there are hundreds of thousands of moves to learn. You will fail if you try to learn them all early in your wrestling career. Moves come with experience. Concepts come first. To start, what is essential is conditioning and learning about angles. Defending your angles and using angles to attack. When it comes…

July Jobs and ISMs Headline Releases this Week There once was a time when Minneapolis Fed President Neel Kashkari was easily the most dovish member of the FOMC. The fact he was on the Sunday news shows yesterday reiterating the hawkish case is just another sign of how intent the Fed is in getting inflation…

Last week the Federal Reserve raised the Fed Funds rate by another 75 basis points – that was no surprise to the market.  However, in Powell’s unscripted remarks at the press conference, he stated that interest rates have reached a “neutral level.”  The market reacted to those words with equities and bonds both rallying.  We…

Over the past several years, bank investors have been hungry to hear about growth and expansion. Revenue and growth have fueled bank multiples. Now, the tone is markedly different. We have poured through the recent 2Q earnings releases, spoken with a rash of institutional bank investors, traded thoughts with analysts, and compiled the following list…

Last week we discussed how lenders might use swaps, caps, floors, and collars to help borrowers manage borrowing costs.  We outlined how the market values swaps and volatility instruments (like caps and floors), and we reviewed the fundamental reasons for how and why these hedging instruments are applied to commercial loans.  In this article, we…

Weak European PMI Readings Boost Treasury Prices Treasury yields are lower this morning after EU composite PMI readings unexpectedly slipped below 50.0 earlier today. Anything below 50 signals contraction and the recession warning sent EU-based yields lower and Treasuries have followed suit on what should be a quiet Friday trading day here.   We will…

For Now, Focus is on Europe Treasuries are finding a bid this morning as concerns re-emerge over possible energy disruptions in Europe which could slow the global economy.   The EU proposed the union cut gas consumption by 15% to be better prepared for a possible full cut-off of gas by Russia heading into the…

Back in 2015, Brazil led the world in fan football-related injuries. Passions ran so high that there would be 25 deaths and about 300 serious injuries from fan-on-fan violence in a typical year. More private security was brought in and fights increased. A more significant police presence was tried, and altercations increased more. It was…

75bps Returns as the Expected Rate Hike for Next Week The initial chatter about a possible 100bps rate hike that came after the ugly June CPI report has died down and a 75bps rate hike has returned as the consensus outlook for next week’s FOMC meeting.   The chatter died down immediately after Friday’s University…

The Federal Reserve is rapidly changing the interest rate environment to fight inflation.  The Fed’s actions are forcing lenders and borrowers to consider ways to protect cash flow, credit, liquidity, and interest rate risks.  Many borrowers ask lenders how they can use swaps, caps, floors, and collars to protect their businesses and lower borrowing costs. …