Following the Fed meeting last week, markets staged a major rally when the Fed gave its clearest signal yet that its tightening campaign is over, projecting more interest rate cuts in 2024. The message sent stocks soaring and pushed the 10-year yield below 4%, and reinforced the Fed’s plan to…
Real GDP growth plus inflation forecasts the 10-year T-Note yield. Core PCE is at 3.46% currently with the expectation of 2.3% to 2.5% in 2024. Combined with a 2% real GDP growth forecast, the 10-year T-Note yield is set to decline to 4.11% in December 2023. Table IChart ITable IIWelcome news…
Predictably, in times of higher interest rates, unrealized losses occur. As yields rose in 2023Q3, the market prices of the bonds fell, and unrealized losses accumulated. According to the FDIC’s quarterly bank data release from last week, those losses jumped by $126 billion (22%) from the previous quarter to $684…
Continuing applications for U.S. unemployment benefits rose to the highest level in almost two years this month, underscoring the difficulty unemployed workers are facing in finding new jobs.1 Recurring jobless claims represent the number of people continuously receiving unemployment benefits. The number of recurring applications jumped to 1.87 million in the…
In the latest Consumer Price Index (CPI) data released by the Bureau of Labor Statistics, energy prices fell drastically, durable goods prices dropped, and food prices rose moderately, but the key area to watch remains in services. The CPI for Rent inflation, or the actual rents that tenants pay, accelerated…
