Well here we go with another jobs number tomorrow. Not that it really matters as I don’t think anyone pays much attention to the numbers anymore–they used to be semi-meaningful, but there is way too much ‘noise’ anymore to hold much meaning.
Anyway the ADP report that was released on Wednesday showed a loss of jobs in January–301,000. Now if the ‘official’ jobs report tomorrow shows anything similar (the forecast if for 150,000 jobs added) it will serve to highlight the major issue that the Fed will run up against as they are hiking interest rates–crazy economic cross currents. Also for those that have not noticed the Atlanta Fed has moved their 1st quarter GDP estimate to .1% on the GDP Now website–more cross currents.
Today we had interest rates ‘pop’ up and the 10 year treasury closed in the 1.83% area, although it had been as high as 1.86% during the day. All of this based upon the Bank of England raising their base rate for the 2nd time by 1/4% to 1/2%. Apparently 1/2 the BOE governors wanted a 50 basis point increase–quite a move for a typically dovish BOE. This aggressive behavior has folks talking again about a possible 1/2% point hike in March by the Fed instead of the more likely 1/4%.
What a mess has been created – the Fed will NEVER raise rates 4 times this year let alone the 7 times that some have projected. What a mess!!