Playing golf today so I’m going to keep this one short and sweet. We hear from some Fed presidents this week and receive some labor statistics.
- Job Openings and Quits
- FOMC Minutes
- Initial and Continuing Jobless Claims
- St. Louis Fed President James Bullard Speaks
- Fed Gov. Christopher Waller Speaks at NABE Conference
- Unemployment Rate
- Labor Force Participation rate (ages 25-54)
That’s it for this week. Next week we get inflation/CPI data.
We saw buyers reenter the bond market last week as they may be placing their bets already on MoM CPI numbers showing a decline in anticipation of July 13’s report.
This is a 1 yr chart of the 30yr MBS. Notice the increased volatility and larger candle sizes of late. The second the Fed decided to shake things up, the markets responded. Everything moves on anticipating inflationary numbers and what the Fed policy will be due to it.
Inflation numbers, and therefore the CPI, are the most important data in today’s environment. After we see some declining inflationary numbers, the Fed will claim victory over taming inflation and how we’re headed back to 2% (although I think we have to deal with higher inflation for a while, unless we can “grow” out of it – tough to do with negative GDP…). I predict then the “health of the economy” indicators, such as GDP, Unemployment numbers, jobs reports, etc. will be the important ones to show we are not heading into a recession.