The 3 yr auction was above average. The yield of 1.237% was just below the when issued of 1.24%. The bid to cover of 2.47, was just above the one year average of 2.44. Lastly, direct and indirect bidders took down 77% of the auction, the most I’ve seen going back to 2003. Bottom line, the highest 3 yr yield since February 2020 brought out some buying. It still …
[Read more...] about 3 yr auction/Bostic’s QT plan in context
Jay Powell’s reappointment testimony is basically a defense of his stewardship as chair over the past four years. He also does tell the American people that he feels their inflation pain. After presiding over a shift in inflation policy to allow a period of higher than 2% inflation to offset a period of below, then arguing that when it was finally here that it was …
While non voting, Richmond Fed president Tom Barkin on Friday said to the WSJ that he'd be on board with a March rate hike too after Daly and Bullard implied the same last week. In the balance between rate hikes and balance sheet run off after QE ends, I'm going to guess here that much will depend on what the yield curve looks like in determining how they proceed as …
[Read more...] about Rate hikes if curve steepens, QT if it flattens?
Positives 1)The household survey in the BLS payroll data said 651k jobs were added after 1.1mm in November. Combine this with a rise of 168k in the labor force and the unemployment rate now has a 3 handle at 3.9%. This compares with 3.5% in February 2020. The all inclusive U6 rate dropped 4 tenths to 7.3% and this was 7% in February 2020. Average hourly hours …
[Read more...] about Succinct Summation of the Week’s Events – 1/7
Understanding that the December payrolls capture net hiring's thru middle of the month, and not all the event cancellations that occurred in the last 2 weeks, the BLS said the jobs count rose by 199k, less than half the estimate of 450k but partially offset by an upward revision of 141k to the two prior months. The private sector contributed 211k of this. Similar …
After Germany yesterday said its December CPI rose .3% m/o/m and 5.7% y/o/y, today we saw the full Eurozone CPI which increased by .4% m/o/m and 5% y/o/y vs the estimates of up .3% and 4.8%. Importantly, the core rate was higher by 2.6% for a 2nd month and one tenth more than forecasted. Within this, non energy industrial goods prices grew by 2.9% y/o/y and services …
Voting member Jim Bullard is saying today that the 1st rate hike could come in March and with respect to the balance sheet, “the FOMC could also elect to allow passive balance sheet runoff in order to reduce monetary accommodation at an appropriate pace.” ‘Could’ is the key word here because this whole conversation just depends. Depends on how markets and the …
While SF Fed president Mary Daly does not vote this year, she is seemingly not anywhere close to agreeing to a shrinkage in their balance sheet after I just saw this headline, *DALY: TRIMMING BAL. SHEET TO COME AFTER NEUTRALIZING FUNDS RATE …
[Read more...] about Daly not on board with QT any time soon
The December ISM services index fell to 62 from 69.1 and that was well below the estimate of 67. New orders fell by 8.2 pts to 61.5 and backlogs were lower by 3.6 pts to 62.3. Inventories remained below 50, down by 1.5 pts to 46.7. Employment declined by 1.6 pts to 54.9 but after jumping by 4.9 pts in November. The trade components were up but only some service …
Before I get to the claims data I want to quote here what former Fed Chair Ben ‘arsonist turned firefighter’ Bernanke said in a November 4th, 2010 editorial he wrote in the Washington Post defending QE1 and the onset of QE2 in terms of its impact on stocks. With respect to QE1 and at the time the newly implemented QE2, “This approach eased financial conditions in the …
[Read more...] about It was Bernanke who started this/Claims
Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor.
