Correspondent Blog

Events in this Cycle Have Happened Fast With no economic releases today, and no planned Fed appearances, it could be a quiet start to the weekend. Let’s hope. For now, Treasuries are sliding from unchanged to down slightly in price with a rebound in stocks indicated. Whether stocks can hold those opening gains into the…

Powell’s Tough Talk Continues We mentioned on Monday investors were going to be looking for clues both for how the economy is reacting to the early rounds of rate hikes, and also additional clues as to the path of those rate hikes. The market and Fed Chair Powell offered up some partial answers to both…

Looking for Clues Treasuries are starting the week tentatively in the green as they await more Fed speak and a look at April retail sales and housing activity. With the rise in rates and, of course, inflation the market will be looking for any sign of buckling by consumers.   As far as Fed speak,…

Hawkish Fed Speak Continues Treasuries are weaker this morning as some hawkish commentary late yesterday from Chair Powell and San Francisco Fed President Mary Daly reiterated the Fed’s commitment to squash inflation.   Powell’s comments were interpreted differently by various outlets but he repeated his comment from the FOMC press conference that should inflation continue…

April CPI Hotter Than Expected April CPI disappointed markets with a hotter-than-expected read and that has sent Treasury yields higher once again.   The overall rate rose 0.3% for the month which was well off the 1.2% increase in March but a touch higher than the 0.2% expected. The year-over-year rate ticked down to 8.3%…

The Beatings Will Continue It’s a new week but the market seems to be in the same frame of mind when we left off last week and that is selling early and often.   The 10yr yield reached a high of 3.20% in early trading today as April CPI looms on Wednesday as does another…

Job Growth Continues While Wage Gains Show Some Moderation Nonfarm payrolls increased 428 thousand with those gains fairly  widespread. Expectations were for 380 thousand jobs and it matched March’s 428 thousand new jobs. The largest gains came in leisure and hospitality, in manufacturing, and transportation and warehousing. However, total nonfarm payrolls remain 1.2 million below…

Market Awaits FOMC Decision and Powell’s Comments It’s not so much the 50bps rate hike we expect from the Fed this afternoon, but how Powell frames expectations for the meetings to come that will be the focus for investors. That will have to come mostly in the post-meeting press conference since we won’t see refreshed…

This Week Should Provide Some Key Answers for Investors By the time we get to the weekend, we should have a lot more information in hand in regards to both the economy, the labor market, and monetary policy. The FOMC meeting’s rate decision on Wednesday is the highlight of the week, and the question is…

Increasing Wage Gains Will Keep the 50bps Rate Hikes Coming   Treasuries are trading heavy this morning as the Employment Cost Index (ECI) came in above expectations and that is sparking concerns of the dreaded wage-price spiral. That is essentially when fatter wallets encourage more spending which in theory contributes to further price increases.  …

Higher Rate Levels Take a Bite Out of Housing Activity   While the Fed has only hiked once to date, they will follow that with a 50bps hike next week, meanwhile, the market has been busy doing plenty of the heavy lifting for the Fed.   One sector that has been a real economic star…

Fed Chair Powell Joins Hawkish Sweepstakes We mentioned earlier that it seems each Fed official is trying to out-hawk the other and Fed Chair Powell has joined that competition.   He mentioned yesterday in an IMF panel discussion that a 50bps rate hike is certainly on the table for May and that additional 50bps hikes…