The 2 yr note auction was mixed, which of course happened within minutes of Yellen basically telling us she would like to hike again in December. The yield of 1.462% was a hair above the when issued but the bid to cover of 2.88 was higher than the one yr average of 2.77. Direct and indirect bidders took 63% of the auction which is slightly above the previous 12 month …
I had to splash water on my face
I had to splash water on my face because I think I’m hearing a more hawkish Janet Yellen in her speech today. There is no question that dovishness runs thick as she is questioning their ability to get inflation and stabilize it around 2% (for reasons she gave like the internet and labor market dynamics) but she is also saying that “it would be imprudent to keep …
Housing, confidence, mfr’g oh my
August new home sales totaled 560k annualized, 25k less than expected and down from 580k in July (revised up by 9k). That August print is the weakest since December. The issue with inventories is being slowly alleviated as the number of homes for sale rose to the most since May 2009 and combined with the home sale decline, months’ supply rose to 6.1 from 5.7 and that …
Why the Confusion?
Fed and Inflation Yesterday we had Fed President Dudley expressing confidence that inflation will rebound and thus he thought more rate hikes were necessary. Another voting member did as well, Neel Kashkari, the ultimate dove who still believes .625% is the appropriate interest rate (he hasn’t yet voted for a rate increase since he started but believes in QT). He’s …
Another good mfr’g report
Dallas After better than expected NY and Philly manufacturing surveys, the Dallas Fed said its index for September rose to 21.3 from 17 and that’s a 7 month high. The estimate was for a drop to 11.5. New orders also rose but the growth rate of those orders slowed. The employment component rose to the best since April 2014. The recent rise in commodity prices drove …
Draghi and Dudley
Mario Draghi isn’t saying too much new but European bonds are off their highs as he did say “We are becoming more confident that inflation will eventually head to levels in line with our inflation aim, but we also know that a very substantial degree of monetary accommodation is still needed for the upward inflation path to materialize.” He repeated that “We will …
Peter is the Chief Market Analyst with The Lindsey Group. He is Co-CIO at Bookmark Advisors, a member of the Advisory Services Network and a regular CNBC Contributor.