Fed Speakers Continue to Explore Hawkish Frontier

Fed Speakers Continue to Explore Hawkish Frontier We mentioned on Monday with a light week of economic information the trading will be driven mostly by Fed speakers trying to out-hawk the other.   So far, we haven’t been disappointed. Reliably quote-worthy St. Lous Fed President James Bullard was first out of the box with a…

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Examining Bond Portfolio Trends: First Quarter 2022

Examining Bond Portfolio Trends: First Quarter 2022 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 $12.9 billion (not including SouthState Bank), or $99 million on average…

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Light News Week Leaves Focus on Fed Speak

Light News Week Leaves Focus on Fed Speak There’s not much on tap this week in the way of first-tier economic data so the focus will be on Fed Speak.   This is the last week for Fed officials to speak before going into their quiet period prior to the May 4 FOMC meeting.  …

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March PPI Hits All-Time High and Treasuries Rally

March PPI Hits All-Time High and Treasuries Rally March PPI came in hotter than expected with new cycle and all-time highs across many of the metrics and Treasuries rallied as a result. Yes, that’s right Treasuries rallied.   While the CPI report from yesterday had a better than expected Core CPI number (thanks to some…

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March CPI and More Treasury Supply Likely to Keep Pressure on Yields

March CPI and More Treasury Supply Likely to Keep Pressure on Yields We open the week with Treasuries continuing to be on the back foot as yields probe ever higher. The 10yr is at 2.75%, the highest level since January 2019.   The upward pressure on yields is likely to remain this week as the…

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March Jobs Report is Solid and Probably Cements a 50bps Rate Hike in May

March Jobs Report Solid Enough to Cement a 50bps Rate Hike in May Total nonfarm payrolls rose by 431k vs. 490k expected, but February was revised higher from 678k to 750k with a total of 95k additional jobs added to the prior two months. Job gains were, once again, widespread led by gains in leisure…

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March Jobs Report Not Likely to Move Markets

March Jobs Report Not Likely to Move Markets To the surprise of nobody who’s been paying attention, the feel good news around peace talks yesterday has dissipated today as Russian military activity suggests no real pull back, but rather a feint to buy some time. The markets want to believe the good news stories, but…

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Will the Consumer Continue to Hold the Line?

Will the Consumer Continue to Hold the Line? Tough and effective Ukrainian resistance to the mortal threat of the Russian invasion has surprised the world. In a similar fashion, but certainly less consequential, the US consumer has withstood the impact of the pandemic and higher prices to continue to drive the economy forward. The question…

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Inverted Curves and Recession Signals

Inverted Curves and Recession Signals With the yield curve flat as a pancake across its belly, investors are wondering if the near inversion of the curve spells a coming recession. While the 2yr-10yr Treasury spread is still 21bps away from inverting, the trend is definitely going in that direction. While the 2yr – 10yr Treasury…

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Light Data Week but Heavy on Fed Speak

Light Data Week but Heavy on Fed Speak The week is light on economic data but heavy on more Fed speak. The microphones have already been turned on this morning and Atlanta Fed President Raphael Bostic was first out of the gate with several statements that sent Treasury yields immediately higher. First, he noted the…

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The Tightening Cycle Begins

Fed Begins Rate Hikes. More to Come As expected, the Fed raised the overnight target rate 25bps to 0.25% – 0.50%.   The updated Dot Plot now shows a total of seven 25bps hikes in 2022, including today’s, and another three hikes in 2023 reaching 2.75%. The longer-run fed funds terminal rate is forecast to…

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Countdown to Rate Liftoff Begins

Countdown to Rate Liftoff Begins The March FOMC meeting concludes this afternoon with a 25bps rate hike a foregone conclusion. As we mentioned on Monday, the real focus for investors will be in the forecast for further rate hikes this year, and the updated economic forecast with inflation and GDP key items of interest in…

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