Correspondent Blog

The housing market has been one of the few sectors that has shown consistent strength from the very beginnings of the recovery after the induced lockdowns of April and May last year. There was, however, some plateauing in sales activity recently, as existing home sales had four straight months of declining sales on a month-over-month…

The marking down of growth expectations given the increasing virus case counts from the delta variant across the globe has continued to pressure Treasury yields lower. Also contributing to the lower yields was the impression the Fed left on investors minds after its June meeting where they moved forward two rate hikes into 2023. The…

Attention Turns to Biden’s Bills After focusing on Fed speak last week the market will turn its attention to the fate of the Biden Administration’s budget, tax, and infrastructure proposals. While the infrastructure plan has bipartisan support it’s very narrow and will require all 10 Republicans who signed onto it to vote for the final…

June retail sales numbers will be released later this morning, and expectations are that sales will rebound after the May pause which came after strong March and April numbers. The report, however, like most of the recent economic releases is likely to be given short attention by the market. They are more focused on Fed…

Who thought the hottest inflation numbers in a dozen years would lead to higher yields? Well, if you guessed that you would be only half right. The June CPI numbers were way above expectations, and that did lead to some selling on the short-end as investors brought forward Fed rate-hiking expectations. The longer-end, however, remains…

Examining Bond Portfolio Trends: Second Quarter 2021 Beginning in May 2012 we started tracking  portfolio trends of our bond accounting customers here at the Correspondent Division of SouthState Bank.  At present, we account for over 130 client portfolios with a combined book value of $15.8 billion, or $122 million on average per portfolio.  Twelve months…

Powell on Capitol Hill and June CPI Headline the Week This week Chair Powell will address committees in both houses of Congress as part of his semi-annual Humphrey-Hawkins testimony.   While we don’t expect more tapering details we could get a clearer view of the Chairman’s thoughts on the inflation threat and the implications for rate…

A funny thing happened on the way to the expected 2% 10yr yield in the second half of 2021. It hasn’t happened yet, and it doesn’t look like it’s going to happen anytime soon. Remember the story early in the year was that with the vaccination roll-out going well, and service-related businesses reopening in larger…

The Treasury market is definitely trading like the best days of the economic recovery may have already past. The latest clue to that is the ISM Services Index for June posted a 60.1 which indicates an expanding sector but it disappointed against a 63.5 expectation and 64.0 print in May. Higher prices, it seems, are…

Personal Income and Spending Numbers Finish the Week This morning we get personal income and spending numbers for May and while those will certainly get some attention, the inflation numbers in the report will also get their fair share of scrutiny. The income and spending numbers have been buffeted in the last few months from…

The Fed leadership always prefers a unified picture of its members to its policies. Sometimes, however, some skirmishes break out over those policies and other desired directions and I think we are in the midst of such a time.  The Fed governors are still very wedded to the idea of the recent inflation thrust as…

Fed Speak and Another Inflation Number This Week After the FOMC meeting last week—and its two hikes in 2023 scenario—put some volatility into markets, investors will be eager to hear more from Fed officials this week to gain additional color on their thinking. With nine Fed officials set to talk this week we will get…