In the absence of any meaningful economic data or market changes, Europe holds the stage. If this were burlesque — and of course it is — the audience yelling, “The hook! The hook!”, the impresario with the shepherd’s crook would long since have yanked Europe by the neck off-stage and dumped it in the alley. [...]
On the first Friday of each month comes the elephant: fresh jobs data from the immediately prior month. No other indicator — maybe not all others combined — has the power of payrolls to move other markets, to describe the economy and the prospects for inflation, and to alter the course of public policy. The [...]
On the surface all is quiet. Since the first week of April the 10-year T-note has not traded above 2.05% or below 1.93%. 1.95% this morning. Thrill-a-minute. Low-fee mortgages have been 4.00% for three weeks (depending on down payment and credit.) The Dow has had 100-point days, but is just yo-yo-ing below the 13,200 top. [...]
Long-term interest rates have stabilized safely in the Fed-controlled zone,10-year T-notes 2.00% and mortgages 4.00%. Stocks and other markets hope for QE3, perhaps as early as next week’s Fed meeting, but that move will likely wait for either weaker global economic data, or inflation falling toward deflation, or both. US data is softening — not [...]
Another week in these odd times, public policy and theoretical economics completely dominating markets…. Fed leadership, Vice Chair Yellen and NY Fed prez Dudley, gave same-day speeches which clarified the following: 1) the do-nothing, hawkish regional-Fed presidents’ club is alone in its treehouse; 2) if anything, the Fed has not done enough since 2009; and [...]
Since mid-March markets have assumed a better US economy, moving to self-sustaining ground, the 10-year T-note spiking from 2.00% to 2.35%, mortgages up almost the same amount. The primary basis for the improved attitude: the Fed’s announcement in March that QE3 was on hold. Then this week’s release of the Fed’s March meeting minutes again [...]
Déjà vu all over again. Another spring, another housing-recovery chorus. Grass turning green, another turning of economic corner. Days longer, oil higher, a new fatal shortage nigh. Vernal equinox, Fed easing must be overdone, bond yields rising, the easing propelling inflation trading and the stock market. Spring, and the sweet scent of horse manure. Birds [...]
A group of colleagues asked me two weeks ago what interest rates were going to do. I answered in an authoritative voice, “They’ve been in the same place for seven months — it’ll take an earthquake to move them.” Ahem. The opinion was correct, but I was clueless about the proximity of the quake. An [...]
Long-term Treasurys and mortgage rates at last broke out of a half-year-long trading range centered on 2.00% for the 10-year T-note, and 4.00% for mortgages. Upward: 10s to 2.33% today, lowest-fee mortgages pushing 4.25%. Verdict first, then evidence: this move is not the start of a bigger one, and is likely to reverse. Silly things [...]
This week brought a lot of new economic information. Raw data is always spun by analysis, sometimes for reasons of advantage in driving clients to buy or sell things, sometimes to further theories, and often for politics, Lord knows. But this time is exceptional, cubed. Global economies have never been in situations like these, and [...]
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