Mixed Economic Data and Fed Meeting

Well we will have the monthly Fed Chair press conference after the monthly FOMC meeting in a couple hours. While it seems pretty obvious that there will be no changes of consequence coming out of the meeting one never knows how silly folks will twist and turn the words to make it an event of importance.

This morning we had quite a mixture of economic data released which again probably just keeps us in a Goldilocks income market.

ADP released their monthly employment numbers and showed a super strong job gain of 275,000 for last month–seems crazy high and the markets seemed to blow it off as unimportant or just wrong. The manufacturing index was released at a soft 52.8% versus a forecast of 54.7% and construction spending was announced at a -.9% against a forecast of -.4%.

With this mixed data the 10 year treasury yield has fallen to 2.48%–off 3 basis points. This is not enough movement to be really meaningful, but it can change quickly this afternoon with the Fed statement and press conference.

We will wait and see if there are ‘fireworks’ this p.m.

2 thoughts on “Mixed Economic Data and Fed Meeting”

  1. Once again Chairman Powell speaks and the market goes south. I’m beginning to think these post meeting news conferences are tradable events. Simply short the market 2 hrs before decisions are announced and cover just before the close. Maybe they should reconsider their policy to have news conferences after every meeting. A news conference once every six months would be more appropriate IMHO.

    1. I am been higher critical of Jay Powell’s qualifications and leadership in 2018. Not in 2019.

      IMHO, market speculation is the root cause. The market apparently was counting on a rate cut. Employment continues to be very strong. GDP is stronger than expected. Inflation is tame.

      Yes; the last rate hike may be reversed at some point but with strong data, it says the last hike didn’t hurt. So, why should the Fed start to telegraph a rate cut?

      I like the monthly news conference because why let the market run ahead of itself for months at a time. This causes steeper drops and higher rises when the Fed lets the market know their thinking. Would rather have it reset every meeting.

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