Correspondent Blog

With the Fed meeting behind us, and the commencement of a tightening cycle after three years of stable to declining funds rates, investors are right to ask, “How many more?” We attempt to answer that question, as murky as the future may be, below. Now that the big September events have happened, there aren’t many…

Meeting Highlights As expected, the Fed raised the funds rate by 25bp resetting the target rate range to 3.75% – 4.00%.  The biggest uncertainty heading into the meeting wasn’t the rate hike itself but the updated rate forecast, or dot plot. In June, they had the median funds rate for year-end 2026 at the pre-meeting…

We’ve reached the point in the week where the Fed takes center stage. The market has convinced itself that a 25 bp hike is coming which would push the Fed Funds range from 3.50% – 3.75% to 3.75% to 4.00%. Of course, the Fed could always surprise us by holding pat but if that does…

Now that we’ve safely navigated the latest inflation readings for August, the stage is set for the FOMC to deliver what the market widely expects will be a rate hike. Interestingly, the market took that slightly hotter core CPI reading, and the surge in rate hiking odds, and rallied equities while the long end remained…

August inflation data began arriving this week with the headline-leading CPI this morning. Results are discussed in more detail below but suffice it to say the monthly core rate was up 0.3% vs. 0.2% expected and odds of a September rate hike moved to 85% vs. 72% before the report. Thus, the stage is almost…

The solid August jobs report from last Friday allows the Fed to focus on its price stability mandate when it meets next week amidst a seemingly stable labor market.  The final pieces of the hike/no hike puzzle should come together this week with PPI Thursday and CPI on Friday. We talk about both reports and…

August nonfarm payrolls rose 162k, easily beating the 55k expected and a nice rebound from the 21k gain in July (revised from an initial -23k loss).  Private sector jobs rose 127k vs. 71k in July.  Two-month revisions added 55k jobs from previous estimates which is a departure from the usual negative revision to jobs.  …

Labor market reports for August are starting to arrive, but the high yield story continues to dominate conversations, while the Iran war shows no signs of abating. Yesterday, the US launched fresh attacks in retaliation for Iran trying to mine the Strait of Hormuz, and as a response to earlier strikes on a US base…

After last week’s full calendar of Jackson Hole, the Fed’s preferred inflation reading, and an update to 2nd quarter GDP, attention shifts to the employment side of the Fed’s mandate with several job-related reports. It must be said, however, that with inflation the current focus of the Fed, and that was made even more clear…

Fed Chair Kevin Warsh will address central bankers, economists, and journalists in Jackson Hole, Wyoming this morning at 10am ET. Investors are hopeful that he’ll be chattier than he has been during his brief tenure as Fed chair.  In a perfect world, markets would like to hear his thinking regarding the reaction function and forward…

A couple key reports arrived this morning with July Personal Income and Spending, including the Fed’s preferred inflation measure, PCE, and the second estimate of 2nd quarter GDP. We discuss those reports in detail below. Meanwhile, the fallout from the failed trade negotiations with Canada continues. The Canadians wasted no time in levying retaliatory tariffs…

The subject of higher bond yields moved centerstage last week and given numerous explanations for the move, and a planned Treasury buyback of debt, it’s likely that the topic will continue to foment, discussion, consternation, and market volatility this week. Away from that ongoing dustup, central bankers across the developed economies will gather in Jackson…