Now that we have the elections mostly behind us we can move on to the regular topics such as interest rates.
The 10 year treasury remains higher and now is yielding around 4.44%. Just like equity prices interest rates remained higher all day yesterday even though one might have expected both markets to retrace somewhat. Obviously the election drove the markets and this will likely continue so we will have too see how this plays out day by day, but in the meantime we will have a continuous flow of economic Data affecting markets.
Today we have the FOMC meeting wrapping up and I see a 1/4% Fed funds rate cut, but at the press conference I see Powell start to hedge on further cuts. The Fed continuously backs themselves into a corner with ‘hints’ on rate cuts and they need to stop this–they need to be truly data dependent and hinting at future actions totally negates consideration of future data.
We will have 1st time unemployment claims shortly and these have been running at a lower number than forecast lately and we will have to see if it continues to forecast relatively strong employment. Today’s forecast is for 220,000 first time claims which is the lowest weekly forecast that we have seen for months–obviously the forecasters have been lowering their forecasts so we will see what happens in 30 minutes.
